- According to the latest certification report of Tether Holding Limited, carried out by BDO Italia, the company’s commercial paper holdings have shown a quarterly decrease of 58%.
- As early as June, Tether stated that it was looking to eventually shed reserves in commercial paper holdings that back USDT.
- Currently, according to BDO Italia, Tether holds $8.5 billion US dollars in commercial paper.
BDO Italia, a member of the accounting organization BDO Global, produced the latest issuer of USDT, revealing that there was a 58% quarterly decline in commercial paper holdings to $8.5 billion US as of June 30.
Since July this year, Tether announced that it has officially started working with BDO Italia. As an accounting firm, BDO Italia performs independent reviews of stablecoin reserves to ensure they are backed by cash or cash equivalents.
This is relevant since BDO Global is one of the five largest accounting firms in Europe. Therefore, it demonstrates to a certain extent Tether’s commitment to offer greater transparency towards its users.
“We are fully committed to maintaining our role as the leading stablecoin in the market”said Paolo Ardoino, CTO of Tether, in the Press release.
Also, it is worth remembering that in mid-June, the company stated that it was seeking get rid eventually of reserves in commercial paper holdings backing USDT. At the time, Tether ensured that commercial paper represented less than 25% backed by USDT, being approximately US$20,096 million as of March 31.
Tether works on increasing USD transparency
The BDO Italia report breaks down the assets that, by June 30, 2022, they were in possession of Tether, being $66.409 million US dollars, with $66.218 million US dollars in liabilities, Tether emphasized that its assets are greater than its liabilities.
Likewise, the report confirmed Tether’s commitment to decrease commercial paper holdings, achieving a reduction of 57.5% compared to March 2022. Currently, according to BDO Italia, Tether holds $8.5 billion US dollars in commercial paper.
For those who are unaware, commercial paper is a short-term financing instrument that is used to pay off short-term debt obligations.
Tether aims to reduce its commercial paper exposure to $200 million by the end of this month and to zero before the end of 2022.
The company also reported that it would have increased its holdings in cash and bank deposits by 32% during this period.
How are Tether reserves made up?
In order to understand how USDT reserves have changed, you need to be able to compare them. Therefore, below we will tell you How were the distributed tether reserves for March 31, 2022
- Cash and Cash Equivalents US$70,585 million (Represented 85.6% of asset holdings): It was distributed as: 55.5% US Treasury Bills, 28.4% Commercial Paper, 9.6% Money Market Funds, 5.8% Cash and bank deposits, 0.15% Reverse Repurchase Agreements and 0.41% Non-US Treasury Bills.
- Corporate Bonds, Funds and Precious Metals $3,729 million US dollars (Represented 4.5% of asset holdings)
- There were $4,959 million US dollars in Other Investments (Representing 6% of holdings)
- Secured loans $3,149 million US dollars (Represented 3.8% of holdings)
- There were US$82.424 million in assets as of March 31, 2022.
While, As of June 30, 2022, according to BDO Italia, asset holdings were distributed as follows:
- Cash and Cash Equivalents US$52,876 million (Representing 79.6% of asset holdings): It was distributed as: 54.5% US Treasury Bills, 15.8% Commercial Paper, 12.8% Money Market Funds, 10, 2% Cash and Bank Deposits, 5.6% Reverse Repurchase Agreements and 0.7% Non-US Treasury Bills.
- There were in Corporate Bonds, Funds and Precious Metals $3,486 million US dollars (Represents 5.2% of asset holdings)
- There were $5,551 million US dollars in Other Investments (Represents 8.3% of holdings)
- There were $4,494 million US dollars in Guaranteed Loans (Representing 6.7% of holdings)
- There were US$66.409 million in assets as of June 30, 2022.
Therefore, Tether reports a decrease in the holding of assets that support USDT of 19% in March – June 2022. However, despite this, the total liabilities for the issuance of digital tokens are $66.204 million dollars and , therefore, are covered by the assets.
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