Tether, issuer of the stablecoin USDT, has reported that it has cut its reserve allocation to commercial paper investments and increased that of US Treasury Notes during the first quarter of 2022.
In a blog post published on Thursday, Tether reported that its reserves were “fully supported,” apparently in an effort to calm many users’ fears around USDT’s brief de-pegging from the US dollar on May 12. According to the stablecoin issuer, its commercial paper holdings during the first quarter of 2022 fell by 17%, from about $24 billion to $20 billion, with a further 20% reduction to be reflected in the next quarterly report. of the company. Tether also increased its investments in money market funds and US Treasury Notes by 13% during the same quarter, from approximately $34.5 billion to $39 billion.
“Tether has maintained its stability through multiple black swan events and highly volatile market conditions and, even in its darkest days, Tether has never failed to honor a conversion request from any of its verified customers,” said the director. Tether technician Paolo Ardoino. “This recent certification further highlights that Tether is fully supported and its reserve composition is strong, conservative and liquid.”
Assurance Opinion Once Again Re-affirms Tether’s Reserves Fully Backed; Reveals Significant Reductions in Commercial Paper and Increase in US Treasury Bills https://t.co/8qVSQFQBeY
— Tether (@Tether_to) May 19, 2022
As part of an $18.5 million settlement with the New York Attorney General’s Office in February 2021 (in which authorities alleged the firm misrepresented the extent to which its USDT stablecoins were backed by fiat collateral), Tether is bound to declare their reserves every quarter. In February, the company reported that it had cut its reserve allocation to commercial paper in the fourth quarter of 2021 from approximately $30 billion to $24 billion, a decrease of 20%.
With a market capitalization of more than $74 billion at the time of publication of this story, USDT exceeds Tether’s reported reserve assets by more than $82 billion. During the extreme volatility of the cryptocurrency market over the past two weeks, Tether reiterated that it would “honor all verified customer conversions” for USDT, apparently in an effort to prove that the asset was as stable as its namesake.
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