Admin Source : Gadgets 360
Tether, the company responsible for issuing the largest stablecoin by market capitalisation, has announced that it has eliminated commercial paper from its reserves, a long-sought goal in the first efforts to shore up its treasury reserves. “This announcement comes as part of Tether’s ongoing efforts to increase transparency, with investor protection at the core of the management of Tethers’ reserves,” the announcement from Tether read. Tether’s CTO Paolo Ardoino was quoted earlier in the year as saying that the company intended to cut its exposure to commercial paper by the end of 2022.
Accomplishing this goal required the elimination of more than $30 billion (roughly Rs. 2,47,200 crore) worth of commercial paper holdings, which Tether said it was able to achieve “without any losses”. The stablecoin provider said it is the “proof of how Tethers’ reserves are conservatively and professionally managed.”
As always, @paoloardoino and the Tether team stay true to their words. Paolo said CP exposure will be zero by October month end. Done. It’s exciting to see asset reserve CP exposure go to zero. It gives Tether a strong basis to harness even more adoption for the coming decade. https://t.co/sMj4kCONkO
— Gabor Gurbacs (@gaborgurbacs) October 13, 2022
The bulk of the previously held commercial assets has been replaced with investments in the US Treasury Bills, with the firm indicating that it “increased its direct exposure to the US Treasuries by more than $10 billion (roughly Rs. 82,400 crore) in the last quarter.”
Tether has been working on improving transparency with the public after years of opaque business practices and questions regarding the state of its reserves.
In October 2021, Bloomberg released an article speculating 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 reserves in the market. This is a step towards even greater transparency and trust, not only for Tether but for the entire stablecoin industry,” the company said.
As part of a settlement with the New York Attorney General’s office, Tether began publishing quarterly attestations of its stablecoin reserves in May 2021.
