- In its Q1 2022 collateral report, Tether stated that its commercial paper holdings in its USDT reserves suffered a 16.8% reduction and a further 20% reduction could be expected in the next quarterly report.
- 86% of USDT reserves are made up of liquid assets such as US Treasury bonds, commercial paper and the rest in money market funds and real cash deposits.
- Tether noted that commercial paper and certificates of deposits made up 49% of Tether assets in June 2021 and in March this year they represented 24%.
Thursday May 19 Tether, USDT stablecoin issuer, public its first quarter 2022 collateral report where it reported reducing commercial paper holdings in its USDT reserves by 16.8%, however, he noted that USDT reserves are “fully supported.”
According to the report as of March 31, 2022, the reserves of US$82 billion intended to serve as support for the supply of the 74.2 billion UST, are composed of 86% liquid assets, which are divided into 52% US Treasury bonds, 37% commercial paper, and the remainder money market funds and real cash deposits.
The other 14% of reserves is made up of:
- $4 billion in corporate bonds
- $3 billion in guaranteed loans
- $5 billion in other investments including cryptocurrencies.
Reduce holdings in commercial paper
As we mentioned earlier, the report reflects a decrease in commercial paper holdings during the first quarter of 2022 of almost 17% and additionally, reported that an additional 20% reduction could be expected, which will be reflected in the next quarterly report.
One aspect to keep in mind is that for June 30, 2021, according to Tether, commercial paper and certificates of deposits made up 49% of Tether’s assets. While, for March 31, it represented 24%.
This percentage will continue to decrease because, in accordance with the Tether CTO Paulo Ardoino, “TEther has seen a further 20% reduction in commercial paper since April 1 and that will be reflected in its next quarterly report.”
Paulo Ardoino stated that the growth of Tether is a sign that the market validates the project, for which they are pleased to share certifications as part of their ongoing commitment to transparency.
What are commercial papers?
For those who don’t know, A commercial paper, or commercial paper in English, is a type of short-term, unsecured debt instrument. Consequently, it is a promissory note with a fixed interest rate. They are usually issued by banks or corporations to cover short-term accounts receivable or cover financial obligations.
Currently this financial instrument occupies 29% of the reserves in cash and equivalents of USDT, that is, it occupies $20 billion US dollars. Also, according to the report, most of this $20 billion is made up of A-1 and A-2 paper.
“ANDThis latest certification further highlights that Tether is fully backed and that its reserve composition is strong, conservative and liquid. As promised, demonstrates the company’s commitment to reducing its investments in commercial paper”, said Paolo Ardoino.
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