Tether, the company responsible for the largest stablecoin issuer by market capitalization, has announced that it has removed commercial paper from its reserves, a long-sought-after goal of its early efforts to increase treasury reserves. “This announcement comes as part of Tether’s ongoing efforts to increase transparency, with investor protection at the core of Tether’s management of reserves,” the announcement from Tether reads. . Earlier this year, Tether CTO Paolo Ardoino was quoted as saying that the company intends to cut its exposure to commercial paper by the end of 2022.
Achieving this goal requires the disposal of more than $30 billion (about 2,47,200 crore) of commercial paper, which Tether say it was achievable “without any loss”. The stablecoin provider said it was “proof of how the reserves of Tethers are managed prudently and professionally.”
As always, @paoloardoino and the Tether team is always true to what they say. Paolo says CP impressions will be zero by the end of October. Done. It’s interesting to see a zero asset reserve CP ratio. It gives Tether a solid base to tap into even more adoption over the next decade. https://t.co/sMj4kCONkO
– Gabor Gurbacs (@gaborgurbacs) October 13, 2022
Much of the commercial assets previously held have been replaced by investments in US Treasury Bills, with the company saying it has “increased its direct exposure to US Treasuries”. to over $10 billion (about Rs 82,400) last quarter.”
Tether has been working to improve transparency with the public after years of unclear business practices and questions regarding the status of its reserves.
In October 2021, Bloomberg released a article speculates that Tether may have had significant exposure to Chinese commercial paper at a time when the country’s real estate market was on the verge of collapse.
“Reducing commercial papers to zero demonstrates Tether’s commitment to backing its tokens with the most secure reserve on the market. This is a step towards transparency and trustworthiness. moreover, not only for Tether but for the whole stablecoins the company said.
As part of an agreement with the New York Attorney General’s office, Tether started publish quarterly attestation of its stablecoin reserves in May 2021.
