Tether Seeks To Eliminate USDT’s Commercial Paper Backing
Tether, a prominent stablecoin startup, is aiming to eliminate commercial paper backing for its US dollar-based stablecoin Tether in the future (USDT).
USDT issued a formal statement on Wednesday denying rumors that the company’s commercial paper portfolio is 85% backed by Chinese or Asian commercial papers and is trading at a 30% discount.
The stablecoin corporation called such claims “absolutely incorrect,” stating that “United States Treasuries” currently account for more than 47 percent of total USDT reserves. USDT claimed in its latest assurance opinion given in May that commercial paper accounts for less than 25% of USDT’s backing, totaling roughly $21 billion as of March 31.
USDT has continued to shrink its current portfolio of commercial paper, lowering its volumes to $11 billion, according to the most recent statement. The corporation aims to reduce it to $8.4 billion by the end of June 2022, with the goal of finally clearing off its commercial paper backing, according to the statement:
“This will gradually decrease to zero without any incurrences of losses. All commercial papers are expiring and will be rolled into U.S. Treasuries with a short maturity.”
Tether also brought up the recent problem of the Celsius loan platform
Stating that Tether’s holding in Celsius was liquidated with no losses. “Tether has currently zero exposure to Celsius apart from a small investment made out of Tether equity in the company,” the firm said.
USDT further claimed that claims claiming USDT has lent money to cryptocurrency venture capital firm Three Arrows Capital are “categorically incorrect.”
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