Tether lessens commercial paper reserves for USDT to zero
On October 13, Stablecoin issuer Tether announced that it has eliminated commercial papers from its USDT reserve, according to its latest reserve update.
According to Thursday’s announcement Tether will invest more in U.S. Treasury Bills and short-term government-issued debt & has cut its commercial paper to zero.
Tether said, “Reducing commercial papers to zero demonstrates Tether’s commitment to backing its tokens with the most secure reserves in the market.”
According to Tether, holding its reserve in additional secured assets will assist with expanding the company’s transparency and bring more prominent security for investors’ funds.
Tether added that it works on its transparency by sharing subtleties of the USDT reserve in its quarterly attestation reports. Beginning around 2017, Tether has been censured for the absence of transparency on the idea of assets backing the USDT stablecoin. In May, reports arose that 85% of the reserves of Tether were held in Chinese commercial papers.
In defense, Tether said its reserve is comprised of less than 25% commercial paper however vowed to slice it down to zero by end of this year. Tether declared in July that it has sliced its commercial paper portfolio to a low of $3.5 billion, down from the past high of $8.5 billion.
Toward September 30 end, Tether revealed that its commercial paper holdings sat below $50 million after $3 billion of the holdings expired. In October 2021 Bloomberg pointed out that Tether may have oversized exposure to Chinese commercial paper at a time when one of the country’s largest property developers, China Evergrande Group, was on the verge of collapse.
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