- Tether has reduced its commercial paper holdings to zero.
- US Treasury bills now make up the bulk of Tether’s reserves.
- So far, Tether’s increased transparency hasn’t helped circulate rumors about its reserves.
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Tether has successfully switched its commercial paper holdings to US Treasury Bills. This could now represent about 56.3% of the company’s total reserves.
“The Safest Stockpile”
Tether has delivered on its promise to do away with commercial paper.
Major stablecoin issuers announced Today, we announced the elimination of commercial paper from our reserves and the replacement of funds with US Treasury securities. According to the company, the move was made to back USDT tokens with “the safest reserves on the market.”
Tether’s plans to reduce its commercial paper reserves were first announced in May.Since then, the company has consistently unloaded The company’s commercial paper secures billions of dollars at a time every two months.
stablecoin It is a cryptocurrency designed to hold parity with government-issued currencies such as the US dollar and the euro. Tether is the world’s largest stablecoin issuer. with a market capitalization of $68.3 billion, USDT is currently the third largest coin after BTC and ETH. Rival centralized stablecoins USDC and BUSD are ranked 4th and 7th, respectively, with market caps of $45.6 billion and $21.6 billion.
Currently on the Tether website indicates Nearly 80% of the company’s reserves consist of cash equivalents and short-term deposits. Of these cash equivalents, 12.88% are money market funds, 10.25% are bank deposits, 5.66% are in the form of reverse repurchase agreements and 0.75% are non-US government bonds. US Treasury bills, on the other hand, account for 54.57% of Tether’s cash equivalents. The remaining 15.89% is from commercial paper. Once the website is updated to reflect Tether’s new reserve structure, the company’s U.S. Treasury Bills could account for up to 70.46% of its cash equivalent reserves, or approximately 56.3% of its total reserves. .
does it matter?
Tether’s latest report highlights the stablecoin issuer’s continued efforts to increase transparency in its proceedings after being hit by multiple waves of fear, doubt and uncertainty surrounding the state of its reserves. Part of it. A critic dubbed a “Tether Truthist” by the rest of the crypto industry, he has repeatedly argued that the company poses an existential threat to cryptocurrencies and the wider financial system due to its sheer size. rice field.
Concerns about Tether are hard to allay. From 2017 to 2022, the company underwent 10 reserves audits from six different agencies, but this did little to drown out negative rumors. swore to undergo a full audit after the article in wall street journal criticized the company for not yet conducting “a corporate colonoscopy-like audit.”
USDT has already lost its $1 peg in the past, but the token has always regained its value quickly, even under pressure.amid the market turmoil caused by Implosion of Terra In May, Tether was able to cash out over $8 billion in USDT without any major issues.
Can Tether clear any doubts about the state of its reserves simply by being more transparent than ever and conducting a full audit? Not so far, but hopefully.
Disclaimer: At the time of writing, the author of this article owned BTC, ETH, and several other cryptocurrencies.