The issuer of the popular stablecoin a cryptocurrency with extremely low volatility, sometimes used as a means of portfolio diversification. Examples include gold-backed cryptocurrency or fiat-pegged cryptocurrency. USDT announced a 17% reduction of commercial paper in its reserves. The message addresses fears of a possible decoupling with the dollar.
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Tetherthe company behind the dollar-linked USDT stable currency, has released a new report on the state of its reserves.
In its Report of Consolidated Reserves published on Thursday, the company indicated a 17% reduction in its commercial paper holdings with the aim of improving the quality of its reserves.Tether said its commercial paper holdings fell from USD $24.2 billion to USD $20 billion in the first quarter of 2021, as reported by CoinDesk .
As of March 31, the end of the first quarter, the stockpile ofTether was USD $82 billion of which 86% consisted of cash cash is the most liquid form of money: physical coins and banknotes in the most narrow sense of the term. and cash equivalents. The remaining includes $4 billion in corporate bonds, $3 billion in secured loans and $5 billion in other investments such as cryptocurrencies, according to the report .
Tether reduces its commercial paper by 20%
Although the company admitted to making even more progress in its commercial paper reduction since then. It should be noted that commercial paper is unsecured short-term debt issued by a corporation.
In a separate communiqué, which was quoted by Decrypt the chief technology officer ofTether, Paulo Ardoino, said the company has continued with an additional 20% cut since the beginning of April.
In fact, since April 1, 2022, Tether has seen an additional 20% reduction in commercial paper which we will reflect in the Q2 2022 report. As Tether’s growth in the marketplace continues to validate the business, we are pleased to share certifications now and in the future as part of our ongoing commitment to transparency.
The news about the reduction of commercial paper comes after Bloomberg published a controversial report last year in which he claimed that much of the commercial role of theTether had been issued by large Chinese companies, which has caused several analysts to question the quality of the company’s reserves.
To date,Tether has refrained from disclosing the names of these companies. As he points out CoinDesk In the last report of the company did not specify the list of agencies that rate commercial paper, except “…”. Ratings from Standard & Poor’s, or equivalent ratings from Moody’s, Fitch or other nationally recognized statistical rating organization “. The report of Tether also does not provide the geographical location of the issuers of the commercial paper.
Fears of untying of USDT
In addition to commercial paper, the USDT issuer added that it has also slightly reduced its cash deposits to increase its holdings of U.S. Treasury bonds. CoinDesk which was based on the latest reports, the cash ofTether increased from USD $4.2 billion to USD $4.1 billion, while bonds increased from USD $34.5 billion to USD $39.2 billion.
Other assets in the company’s stock didn’t seem to vary much. As the media outlet reported, the “Other investments” category, which includes cryptocurrencies, has remained constant, dropping slightly from $5.02 billion to $4.96 billion. AlthoughTether has not disclosed which assets specifically comprise this category, which has led to some uncertainty.
The most recent report fromTether is accompanied by a certification of the independent audit an audit is a process where developers inspect the underlying code and/or algorithm that compose systems and applications. firm MHA Cayman which independently reaffirmed the accuracy of the quarterly reserves report of Tether .
Ardoino’s Thursday release and statements possibly seek to address a place where cryptocurrency can be sent to and from, in the form of a string of letters and numbers. widespread investor fears of a potential USDT unpegging. The largest stablecoin by market an area or arena, online or offline, in which commercial dealings are conducted. capitalization, which is expected to maintain a stable price of $1,perdió momentáneamente su paridad la semana pasada, tocando los 97 centavos.
The untying ofTether came amidst the plunge of the algorithmic stable currency currency is a medium of exchange that defines value. UST, from Earth which lost its parity with the dollar. Since then, USDT’s market capitalization has fallen by nearly $9 billion amid increased liquidations of the asset and a broader correction a correction is a pullback of an asset’s price of at least 10% to adjust for over-valuation. scenario in the cryptocurrency cryptocurrencies are digital currencies that use cryptographic technologies to secure their operation. market.
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Article by Hannah Estefania Perez / DiarioBitcoin
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