Tether Announces $82.4 Billion Reserves To Back Up USDT

    The world's largest stablecoin has recently released its quarterly report.

    The report shows that Tether’s reserves were $82.4 billion as of March 31, exceeding the amount required to redeem issued tokens. Note that this report does not cover the turbulences of the past few weeks.

    “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,” said Tether chief technical officer Paolo Ardoino. “This latest attestation further highlights that Tether is fully backed and that the composition of its reserves is strong, conservative, and liquid.“

    Tether pledged an additional 20% reduction in commercial paper amid concerns that short-term loans could be linked to Chinese real estate. 

    However, recent data shows that Tether’s market cap has dropped 11% since the Terra crash. The report is a part of Tether’s ongoing commitment to transparency, which is the result of a lawsuit that requires the company to release testimonial information to third parties four times a year.

    Tether commercial papers drop

    According to the report, the commercial paper used to support the stablecoin issuance of Tether fell 17%, from $24.2 billion to $19.9 billion, and continued to plunge by 20% since April 1.

    The total commercial paper allocation can be down to $15.92 billion. However, market data shows that Tether’s total market capitalization has fallen by more than 11% since the beginning of May. This is partly due to the collapse of the UST caused investor confidence in stablecoins to decline. 

    The average ranking of commercial paper and certificates of deposit has increased from A-2 to A-1 since the last report.

    As following Latham & Watkins, A-1 is the highest rating for short-term debt instruments, indicating that Tether can hold the highest quality liquidity instruments currently. This ranking is comparable to Goldman Sachs, GlaxoSmithKline and Walt Disney.

    The report describes that Tether is not only fully backed, but also holds more capital than needed to buy back all of the existing USDT, and invest in companies that are similar to those in the S&P500 or Dow Jones.

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