Tether, the significant stablecoin, is planning on ultimately getting rid of commercial paper backing for Tether (USDT), its United States dollar-based stablecoin.
Tether recently issued an official statement to refute the reports highlighting that apparently, the commercial paper portfolio of Tether is 85% backed by Chinese or Asian commercial papers and is being traded at a discount of 30%.
The stablecoin entity addressed these allegations as completely false, emphasizing on the fact that over 47%of total USDT reserves are now the United States Treasuries. In the most recent assurance opinion issued last month, Tether signified that commercial paper accounts for less than 25% of the USDT backing, equating to approximately $21 Billion as of March 31.
Tether To Cut Down Commercial Paper Backing Completely
The latest statement also highlights that the stablecoin firm has continued to decrease its current portfolio of commercial paper. And lessened its volumes to $11 Billion. And that the firm further plans to reduce it to $8.4 Billion by June 2022 end. In the end, clearing out its commercial paper backing.
According to the statement, this will steadily decrease to zero without any losses. All commercial papers are expiring and would be rolled out in the US Treasuries with a short maturity.
Tether further noted the recent crisis of the Celsius lending platform, emphasizing that the Celsius position has been liquidated with no losses to Tether. The firm signified that Tether has zero exposure currently to the lending platform except for a small investment made out of Tether equity in the company.
It also argued that the reports mentioning that Tether has a lending exposure to Three Arrows Capital, the crypto venture capital firm, are categorically false.
At the time of writing, Tether (USDT) is exchanging hands at $0.999 with a market cap of $69,965,729,478 and is up by around 0.03% in the last twenty-four hours. It is one of the leading stablecoins in the entire cryptocurrency market as it maintains its third position.
Source: https://www.thecoinrepublic.com/2022/06/16/tether-to-focus-on-cutting-down-usdts-commercial-paper-backing-to-zero/