“This latest attestation further highlights that Tether is fully backed and that the composition of its reserves is strong, conservative and liquid,” said Paolo Ardoino.
USDT Stablecoin issuer Tether (USDT) has reported it cut its reserves allocation to commercial paper investments and increased that of United States Treasury bills over the first quarter of 2022.
In a Thursday blog post, Tether reported its reserves were “fully backed,” seemingly in an effort to assuage many users’ fears around USDT briefly depegging from the dollar on May 12. According to the stablecoin issuer, its commercial paper holdings over Q1 2022 decreased 17% from roughly $24 billion to $20 billion, with an additional 20% reduction to be reflected in the firm’s next quarterly report. Tether also increased investments in money market funds and U.S. Treasury bills by 13% over the same quarter, from roughly $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 once failed to honor a redemption request from any of its verified customers,” said Tether chief technical officer Paolo Ardoino. “This latest attestation further highlights that Tether is fully backed and that the composition of its reserves is strong, conservative and liquid.“
As part of an $18.5 million settlement with the Office of the New York Attorney General in February 2021 — in which authorities alleged the firm misrepresented the degree to which its USDT stablecoins were backed by fiat collateral — Tether is required to disclose its reserves every quarter. In February, the company reported it had cut its reserves allocation to commercial paper in Q4 2021 from roughly $30 billion to $24 billion, a 20% decrease.
With a market capitalization of more than $74 billion at the time of publication, USDT exceeds Tether’s reported reserve assets at more than $82 billion. During the extreme volatility in the crypto market over the last two weeks, Tether reiterated that it would “honour all redemptions from verified customers” for USDT, seemingly in an effort to prove the asset was as stable as its namesake.
Source: Cointelegraph
