Tether discloses its reserves amid de-peg gossip
The collapse of Terra and its stablecoin UST, which happened a little over a week ago, caused real panic in the stablecoin segment. Some of them, like USDC and BUSD, felt pretty good, trading at a premium to the market. Others like USDN, DEI and USDT found themselves under pressure, mainly due to lack of user confidence in them.
It would seem that Tether’s USDT, as one of the most popular stablecoins, should calmly survive such market turmoil and act as a safe haven for investors’ funds. However, the public still does not fully trust USDT, because of its run-ins with the U.S. SEC and an overblown, as it seems, number of reserves.
The situation was also aggravated by the high proportion of treasury notes in reserves released by Tether Holdings in December 2021. The problem with treasury notes is that they are much less liquid, and in the event of a financial crisis , it would not be so easy to get rid of them.
Tether has been regularly warned about this by major analysts, and Tether’s CTO has agreed with them, stating that they are reducing their holdings of those securities and increasing the exposure of U.S. treasuries.
Tether reassures its users and silences haters
Finally, on May 19, Tether released its consolidated reserves report, which reflected a 17% quarter-over-quarter decline in commercial paper from $24.2 billion to $19.9 billion.
Conducted by independent accountants MHA Cayman, the attestation represents the group’s assets as of March 31, 2022, as follows:
- Consolidated total assets are at least $82,424,821,101
- The group’s consolidated assets are greater than its consolidated liabilities
- The group’s reserves against the digital tokens issued exceed the amount required to redeem them
- Consolidated assets show a significant decrease in average maturity with a focus on shorter term assets
The report also reflects an increase in the group’s investments in money market and U.S. Treasury bills, which rose from $34.5 billion to $39.2 billion, an increase of more than 13%.
Paolo Ardoino, CTO of Tether, also commented on the report, saying the past week is a clear example of Tether’s strength and resilience. Tether is fully funded and its reserve mix is solid, conservative, and liquid.
