On October 13, 2022, Tether Holdings Limited announced that the stablecoin issuer had reduced the company’s commercial paper holdings to zero. The company has indicated it will achieve this goal for some time, and Tether said that shrinking commercial paper holdings to zero “represents Tether’s commitment to backing its tokens with the safest reserve on the market.”
Tether Axes worth $30 billion by Paper Trading Holdings, which uses US T-Bills instead
The company behind the largest stablecoin by market capitalization, Tether, has disclosure that USDTIts reserves are exposed to US Treasury Bills (T-Bills), as opposed to holding commercial paper. This announcement comes after a statement made by Tether’s Chief Technology Officer, Paolo Ardoino, on October 3.
At that time, Ardoino explain that U.S. Treasury bills represent more than 58% of the company’s reserves, and he added ” [Commercial paper] exposure is [less than] 50 million right now. ” Management company USDTa stablecoin with a market valuation of around $68.53 billion, believes the decision to remove commercial paper holdings is positive for the entire crypto industry.
“The reduction of commercial papers to zero demonstrates Tether’s commitment to backing its tokens with the safest reserves on the market,” the company stated on Thursday. “This is a step towards even more transparency and trustworthiness, not only for Tether but for the entire stablecoin industry.”
Tether’s move follows Stablecoin Terra Crash 5 months ago, both Tether and Usd Coin have dropped billions of dollars since then
Tether’s move follows issues related to Terra . blockchain and the UST takedown event last May. Furthermore, a handful of stablecoins have fallen from the equivalent of $1 following the collapse of the UST. The news also follows the market capitalization of stablecoin USDC farts over the past few months down to today’s valuation of about $45.82 billion.
USDTIts market capitalization also dropped, following the collapse of Terra, as Bitcoin.com News report in mid-June, the quantity USDT in circulation decreased by more than 12 billion VND in two months. Despite the drops USDT and USDC in circulation, the stablecoins remain the top two stablecoin assets by market capitalization and the third (USDT) and the fourth largest crypto asset (USDC) by valuation.
What do you think about Tether fulfilling the company’s promise to reduce its commercial paper holdings to zero? Let us know your thoughts on this topic in the comments section below.
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