Tether’s commercial paper holdings are now under $50 million

Tether Holdings Limited, the issuer behind the world’s largest stablecoin USDT, reduced its commercial paper holdings to less than US$50 million as of September 30, according to a a tweet by Tether’s Chief Technology Officer Paulo Ardoino.

See related article: SEC Fines Tether’s Ex-Auditor $1 Million Over Accounting Misconduct

Fast facts

• In the tweet, Arduino also said that Tether had increased its holdings of US Treasuries to 58.1% of its total portfolio, up from the June 30 figure of 43.5%.
• Stablecoins are cryptocurrencies whose value is tied to that of an underlying asset, such as the US dollar, by holding assets equivalent to or greater than the crypto’s total market capitalization. Because of this, there is a lot of care behind owned stablecoin issuers to ensure that they are indeed fully collateralized. USDT is the world’s largest stablecoin with a market cap of US$67.9 billion.
• Treasury bills are perceived as more stable than commercial paper because they offer “zero risk of default” because the purchase price is always guaranteed. Commercial papers are short-term debt products that companies issue to raise financing.
• Tether has been reducing its commercial paper holdings for some time, reducing its holdings by 21% in the fourth quarter of 2021, saying in June that it was looking to reduce its commercial paper holdings to zero and instead hold the equivalent in Treasuries. ​US bills. The firm has reduced its commercial paper backlog from 20 billion units in Q1 2022 to 8.4 billion units by Q2 2022.
• The US Securities and Exchange Commission announced last week that it had filed and settled a $1 million fine against Tether’s former auditing firm, Friedman LLP, for “serious violations of federal securities laws.”
• Due to a February 2021 settlement with the New York State Attorney General, Tether is required to issue quarterly reports on its reserves. The firm announced in August that it was partnering with accounting firm BDO Italia to produce those reports going forward.

See related article: Tether brushes off WSJ’s doubts about its reserves