Tether announces a 17% drop in commercial paper holdings in Q1 2022.
“This recent attestation further demonstrates that Tether is completely supported and that its reserve composition is robust, conservative, and liquid,” stated Paolo Ardoino. Tether (USDT) revealed that it reduced its reserves allocation to commercial paper assets and boosted its allocation to US Treasury bills in the first quarter of 2022. Tether said its reserves were “completely supported” in a blog post on Thursday, ostensibly to satisfy many users’ concerns over USDT momentarily depegging from the dollar on May 12. According to the stablecoin issuer, its commercial paper holdings declined 17 percent in Q1 2022, from around $24 billion to $20 billion, with a further 20% reduction to be recorded in the firm’s next quarterly report. Tether raised its investments in money market funds and US Treasury bills by 13% in the same quarter, from around $34.5 billion to $39 billion.
“Despite many black swan occurrences and very volatile market conditions, Tether has never once failed to honor a redemption request from any of its verified users,” said Paolo Ardoino, Tether’s chief technical officer. “This recent evidence demonstrates that Tether is fully financed, with a reserve composition that is robust, conservative, and liquid.” As part of an $18.5 million settlement with the New York Attorney General’s Office in February 2021, Tether is obligated to report its reserves every quarter. Authorities claimed the business misrepresented the extent to which its USDT stablecoins were backed by fiat collateral. In February, the business announced a 20% reduction in its reserves allocation to commercial paper in Q4 2021, from about $30 billion to $24 billion. USDT’s market value at the time of publishing was more than $74 billion, exceeding Tether’s claimed reserve assets of more than $82 billion. During the previous two weeks of significant volatility in the crypto market, Tether repeated that it will “respect all redemptions from verified clients” for USDT, ostensibly to demonstrate that the currency was as stable as its namesake.
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