Tether immediately dispelled rumors regarding its commercial paper portfolio. Rumors say that it is “85% backed by Chinese or Asian commercial papers and being traded at a 30% discount.”
With a market capitalization of over $70 billion, Tether’s USDT is the largest stablecoin by far. However, it recently experienced a blow as Terra’s algorithmic stablecoin UST dropped, losing ground to Circle’s competing stablecoin USDC.
Rumors on its commercial paper portfolio
In a statement published on Wednesday, Tether said that these rumors may spread to cause more panic in the stressed-out market.
Moreover, it added that Tether’s over 47% of total USDT reserves are now US Treasuries. Which amounts to over $39.199 billion, linking its latest assurance opinion.
It added that its “commercial paper makes up less than 25% of USDT’s backing.”
Meanwhile, its Chief Technology Officer (CTO), Paolo Ardoino, also quashed rumors that Tether has exposures to crypto lending platform Celsius and hedge fund Three Arrows Capital, also known as 3AC.
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Tether reduced almost 50% its CP holdings since 31st March 2022. By end of June only 8.4B CP left. CP exposure going to be reduced to 0.No exposure to Celsius on our reserves. Liquidated without losses.
No exposure to 3AC. https://t.co/vPUW3s16Pk— Paolo Ardoino 🕳🥊 (@paoloardoino) June 15, 2022
Sunday’s stoppage of withdrawals from the cryptocurrency lending platform Celsius has caused investors to worry about the safety of their funds. This message should allay their fears.
Commercial paper portfolio decreasing
According to the most recent assurance opinion, Tether’s assets are $20 billion and consist of commercial paper from companies and certificates of deposit from financial institutions. Ardoino said in May that the stablecoin provider had halved the amount of commercial paper supporting USDT. The same he expressed on Twitter yesterday.
Once its commercial paper matures, Tether said that the money would be invested in US Treasury bonds. Since March 31, its commercial paper portfolio has decreased to $11 billion and will reach $8.4 billion by June 30.
Tether is presently the third most popular asset on Coinbase and Binance, according to the exchanges’ websites, with a market cap of almost 7% of the whole crypto market.