Press ESC to close

CTO revealed Tether commercial paper experience now under $50M

  • News
  • October 4, 2022
  • (0)

Tether is becoming more transparent. They have appointed a new accounting firm to conduct regular audits and attestation reports to ensure its stablecoin is properly backed by the USD.

Stablecoin issuer Tether (USDT) has nearly totally reduced its commercial paper holdings, with less than $50 million worth of commercial paper units as of Sept. 30, 2022.

Tether CTO Paolo Ardoino made the declaration in an Oct. 3 tweet, adding also that Tether’s United States Treasury bills increased to 58.1% of its total portfolio, up 25.1% from its Jun. 30 figure of 43.5%.

Commercial papers are short-term debt instruments dispensed by companies, which are often used to finance various business operations, while treasury bills are demanded to be more stable than commercial papers as they offer “zero default risk” since investors are guaranteed to at least recoup the purchase price.

In June, Tether claimed that it was aiming to reduce commercial paper backing of USDT TO “zero”, and rolled into short-maturity U.S. Treasury bills – aimed at growing the stability of its ecosystem and USDT stablecoin.

The stablecoin issuer has also been seeking to increase transparency into its dollar reserves and backing. 

In July, it appointed European accounting firm BDO Italia as a new auditor to autonomously review its stablecoin reserves in a bid to improve transparency and more regularly disclose audit and attestation reports.

Last month, Tether was ordered by a United States District Court in New York to provide documents that prove the U.S. dollar 1-to-1 backing of the USDT stablecoin on Sept. 19.

As for when Tether’s transparency report will be updated, Ardoino stated the deadline generally takes 45 days, but now expects its new auditor to improve this process and reduce that timeline.

Tether’s plan to slash its entire commercial paper holdings by the end of 2022 is well underway, with the firm cutting down its reserves from 20 billion units as of Q1 2022 to 8.4 billion units as of Q2 2022. 

USDT is presently the largest stablecoin, and the third highest of all digital assets according to CoinGecko data.

 

Leave a Reply

Your email address will not be published. Required fields are marked *