Tether’s current consolidated total assets are greater than those in December 2021 and now exceed its liabilities. The company had USD 30.8 billion in commercial paper but has reduced its holdings by 35% over the last year.
The recent collapse of TerraUST (UST) caused a panic in the ecosystem of stablecoins. The transparency of some platforms, such as USDC and BUSD, kept investors calm. However, mistrust toward the reserves of USDN, DEI, and USDT put users under much pressure.
As Tether (USDT) is one of the most popular stablecoins, it should be able to survive the market turmoil without problems. However, the confrontations of Tether with major regulatory institutions like the SEC have led some to distrust USDT.
That situation has worsened since Tether made it public that it holds large reserves of commercial paper. Those short-term debt instruments are difficult to trade if there is a financial crisis, causing a lack of liquidity.
Tether has had to release its reserve report to reassure investors about the tense situation in the stablecoin ecosystem. Those users are worried that their funds invested in USDT will disintegrate, as with UST.
What the Report on the Reserves of Tether Reflects
The latest reserves report released by Tether reflects a 17% decline in its commercial paper. It went from USD 24.16 billion in the previous quarter to USD 20.09 billion today. Cayman Islands-based accounting firm MHA Cayman conducted the quarterly report on the reserves of Tether.
The report indicates that the total consolidated assets of Tether are USD 82.424 million, compared to USD 78.6 billion in December. In addition, the consolidated assets of the firm exceed its consolidated liabilities.
The report also reflects an increase in its investments in US Treasury bonds. They went from USD 34.5 billion to USD 39.2 billion, representing more than 13%.
The cryptocurrency reserves of Tether exceed USD 4.9 billion, while its reserves of corporate bonds are USD 3.729 million. In addition, their reserves in guaranteed loans are around USD 3,100 million.
Paolo Ardoino, CTO of Tether, also said that the above situation proves the strength and resilience of the firm. The report details the complete funding of the USDT stablecoin and the strong, conservative, and liquid composition of its reserves.
Tether Reduces 17% of its Holdings in Commercial Paper
Tether announced the reduction of its holdings in commercial paper by 17% compared to the previous quarter to improve the quality of its reserves.
In June 2021, Tether had USD 30.8 billion worth of commercial paper and deposit certificates in its reserves, 49% of its total assets. Tether has reduced its holdings in those short-term debt instruments by 35% over the last year.
The report on the reserves of Tether was part of an agreement with the New York Attorney General in February 2021. Tether had to publish quarterly certifications of its assets and liabilities to show transparency about what backs USDT.
Finally, the report stated that Tether had seen a further 20% reduction in its commercial paper since April. However, there will be further details in its following 2022 quarterly report on that data.
By Alexander Salazar
