Top stablecoin issuer Tether (USDT) is completing its goal of eliminating commercial paper holdings from its reserves before the end of 2022.
The firm says it has finally cut its commercial paper investments to zero from over $30 billion in September last year and is moving to diversify its portfolio.
“Tether is proud to announce that we have completely eliminated commercial paper from our reserves. This is evidence of our commitment to back our tokens with the most secure, liquid reserves in the market.
Tether has eliminated over $30 billion of commercial paper without any losses, a proof of how Tethers’ reserves are conservatively and professionally managed.”
Commercial papers are unsecured promissory notes issued by large institutions to obtain funds for short-term debt obligations. Tether planned to completely do away with its commercial paper holdings by October to early November this year as part of an ongoing effort to increase transparency.
“Reducing commercial papers to zero demonstrates Tether’s commitment to backing its tokens with the most secure reserves in the market. This is a step towards even greater transparency and trust, not only for Tether but for the entire stablecoin industry.”
Tether is replacing its commercial paper holdings with other assets. The stablecoin issuer says that in the last quarter alone, its exposure to U.S Treasury Bills has increased by over $10 billion.
“This announcement further ensures that Tether has a diversified portfolio with limits to exposure to higher-risk assets. It demonstrates Tether’s commitment to lead by example, as part of our ongoing push toward increased transparency for the stablecoin industry.”
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Source: https://dailyhodl.com/2022/10/14/top-stablecoin-tether-usdt-slashes-30000000000-in-commercial-paper-holdings-buys-up-u-s-treasury-bills/