Stablecoin Tether Issuer Delivers on Promise by Zeroing Commercial Paper Holdings – Bitcoin News

On October 13, 2022, Tether Holdings Limited announced that the issuer of the stablecoin has reduced the company’s commercial paper holdings to zero. The company has said it would hit this target for a while now, and Tether says that reducing commercial paper holdings to zero “demonstrates Tether’s commitment to backing its tokens with the safest reserves on the market.”

Tether wipes out $30 billion in commercial paper holdings, firm taps into US Treasury bills instead

The company behind the largest stablecoin by market cap, Tether, has revealed that USDT reserves are exposed to US Treasury Bills (T-Bills), in contrast to commercial paper holdings. The announcement follows a statement Tether CTO Paolo Ardoino made on Oct. 3.

Stablecoin issuer Tether delivers on promise by zeroing out commercial paper holdings
Chart created by Tether showing the stablecoin’s drawdown in commercial paper holdings.

At the time, Ardoino explained that US Treasury bills accounted for more than 58% of the company’s reserves, further saying “ [Commercial paper] the exposure is [less than] 50M now.” The company that manages USDT, a stablecoin with a market valuation of around $68.53 billion, believes the decision to remove commercial paper holdings is a positive one for the crypto industry as a whole.

“Reducing commercial paper to zero demonstrates Tether’s commitment to backing its tokens with the most secure reserves on the market,” the company stated Thursday. “This is a step towards greater transparency and trust, not only for Tether but for the entire stablecoin industry.”

Tether’s move follows the collapse of Terra Stablecoin 5 months ago, both Tether and Usd Coin have lost billions since then

Tether’s move follows issues associated with the Terra blockchain and the UST depeal event last May. Additionally, a handful of stablecoins have de-pegged from the $1 peg following the collapse of UST. The news also follows the decline in the market cap of stablecoin USDC over the past few months to the current valuation of around $45.82 billion.

The market capitalization of USDT also fell, following the collapse of Terra, as Bitcoin.com News reported in mid-June that the amount of USDT in circulation dropped by more than 12 billion coins in two months. Despite the declines in USDT and USDC in circulation, stablecoins remain the top two stablecoin assets by market cap, and the third (USDT) and fourth (USDC) largest crypto assets by valuation.

Tags in this story

Commercial Paper, Commercial Paper Holdings, USDT Commercial Paper, Consolidated Reserves Report, Dollar-Pegged Crypto, Paolo Ardoino, Stablecoin Assets, Stablecoin Reserves, Stablecoins Fluctuate, T-notes, Tether, Tether CTO, Bonds Treasury, US Treasury Bonds US Treasury Notes, currency usd, USDC, USDT

What do you think about Tether delivering on the company’s promise to zero out commercial paper holdings? Let us know what you think about this topic in the comments section below.

jamie redman

Jamie Redman is the news lead at Bitcoin.com News and a fintech journalist based in Florida. Redman has been an active member of the cryptocurrency community since 2011. He is passionate about Bitcoin, open source, and decentralized applications. Since September 2015, Redman has written over 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.




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