Amid crypto meltdown, Tether reduces corporate debts in USDT reserves

abdelaziz Fathi

Tether, which is closely affiliated with crypto exchange Bitfinex, has drastically reduced its holdings of commercial debt in its reserves over the last six months. Instead, the stablecoin issuer allocated most of its non-fiat reserves to Treasury bills, almost doubling assets in short-term government securities.

Tether

Tether’s chief technology officer Paolo Ardoino said in a Twitter Spaces chat that the issuer of the world’s most-used stablecoin now holds the majority of its reserves in US Treasuries.

As the company continues to face questions about what its USDT token is actually backed by, Tether has been reducing the amount of corporate debts in its reserves. In the September-December quarter, commercial papers made up nearly a third of Tether’s total holdings compared to 44% in the previous quarter.

In absolute terms, the value of these instruments dropped by more than $6 billion, from $30 billion in Q3 to $24 billion in December. Additionally, Tether reduced its cash assets, from $7.2 billion to $4.2 billion.

As part of its settlement with US regulators last year, Tether is required to release quarterly attestations of its assets and liabilities in order to be more transparent with its token holders over what exactly backs its stablecoin.

Has Anyone Seen Tether’s Billions?

The new disclosure comes as the meltdown in other stablecoins rippled through cryptocurrency markets and pushed USDT itself below its dollar peg. Tether’s coin dropped to as low as 95 US cents yesterday, but then recouped losses and was last traded at 99 US cents, according to CoinMarketCap.

In October 2021, Bloomberg ran an article titled “Anyone Seen Tether’s Billions?” claiming that Tether invested billions of dollars in short-term loans in large Chinese companies – including Evergrande, which is facing one of the world’s largest-ever defaults.

Tether issued a response to the surfaced report on the company’s website. It denied the findings of Bloomberg’s paper, even accusing the author and its sources of unethical motivations.

Tether — which claims to back its tokens 1-to-1 with the US dollar to ensure stability in value — said the reporter relied on John Betts, the former head of Noble Bank, whom Tether fired as its banker. The company added that it’s already suing Betts for engaging in “egregious and wasteful self-dealing and seeking to enrich himself at Noble’s expense.”

Read this next

Technical Analysis

EURJPY Technical Analysis Report 28 March, 2024

EURJPY currency pair under the bearish pressure after the pair reversed down from the major resistance level 164.25, which also stopped the sharp weekly uptrend at the end of last year,

Digital Assets

BlockDAG’s Presale Hits $9.9M, MultiversX & MINA Price Predictions Show Green

Read about BlockDAG’s promising $10 prediction and insights on MultiversX Price Prediction as MINA’s potential unfolds.

Digital Assets

Rockstar Co-Founder and All-star Line Up Join Advisory Board to Take Metacade into Post Beta Orbit

Metacade, the revolutionary Web3 gaming platform, prepares to streak out of beta with a slew of ground-breaking initiatives that will redefine the way blockchain games are developed.

Retail FX

Prop firm The Funded Trader shuts down, claims relaunch in April

Prop trading firm The Funded Trader has ceased all operations, with claims for a relaunch in the near future.

Digital Assets

Ethereum-Based Tokenized Real Estate Platform USP Launches On Republic

How This Californian Startup Is Revolutionizing Real Estate Investment through Ethereum-Based Tokenization.

Digital Assets

Sui Spikes in Weekly DEX Volume, Joins Top 10 of All Blockchains

March DEX volume on Sui stands at over $2.88B – up more than 49% from February – with decentralized exchange Cetus and wholesale liquidity layer DeepBook leading.

Digital Assets

Prisma Finance suffers $10 million crypto exploit, attack ongoing

Liquid staking protocol Prisma Finance fell victim to a security exploit on March 28, resulting in nearly $10 million in Prisma mkUSD and wrapped stETH being stolen by hackers.

Digital Assets

Masa and LayerZero: Bridging Blockchains for Data Sovereignty

Masa Network is poised to revolutionize the personal data landscape with its upcoming launch as a cross-chain platform, making it accessible on a variety of blockchains right from the start.

Digital Assets

Big Time Generates over $100M in Revenue since Preseason

Innovative game developer Big Time Studios announces that its highly anticipated free-to-play multiplayer action/MMO RPG Big Time, has generated $100M in revenue. According to the team, players transacted a total volume of over $230M, without selling a single token.

<