Tether Q1 2022 report shows a $4 billion decrease in commercial paper holdings

Tether, the issuer of the world’s largest stablecoin by market capitalization, USDT, has reported it cut its reserves allocation to commercial paper investments by 17%. The firm also stated that it increased that of its United States Treasury bills over the first quarter of 2022.

In a Thursday blog post, Tether reported its reserves were “fully backed,” seemingly in an effort to ease the minds of the crypto community, as a result of concerns around USDT briefly depegging from the dollar on May 12.

According to Tether, its commercial paper holdings over Q1 2022 decreased 17% from roughly $24.2 billion to $19.9 billion. The company added that it planned to cut its commercial paper by another 20%, which would be reflected in its second-quarter report.

What you should know

  • Tether also increased investments in money market funds and U.S. Treasury bills by 13% over the same quarter, from roughly $34.5 billion to $39.2 billion.
  • Bloomberg said last October said that much of Tether’s commercial paper had been issued by big Chinese companies, causing some analysts to question the quality of the reserves. Tether has refrained from disclosing the names of those firms.
  • Tether had about $82 billion of reserves on March 31 last year, of which cash reserves and bank deposits accounted for $4 billion. Its current market cap is about $74 billion, according to CoinMarketCap.
  • The company had some difficulty dealing with investor fears over the recent TerraUST collapse. During the last week, USDT’s market cap dropped by about $9 billion amid a spike in redemptions of USDT for dollars.
  • On May 12 the company said in a post that it would honour all redemptions as proof of its solvency.

Tether chief technical officer Paolo Ardoino stated, “Tether has maintained its stability through multiple black swan events and highly volatile market conditions and, even in its darkest days, Tether has never once failed to honor a redemption request from any of its verified customers. This latest attestation further highlights that Tether is fully backed and that the composition of its reserves is strong, conservative and liquid.”

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