Tether has made good on its good promise to get rid of commercial paper by the end of the year
Stablecoin issuer Tether has reduced the share of commercial paper in its reserves to zero, according to its Thursday post.
The company claims that it has replaced it with U.S. Treasury Bills (T-Bills).
Tether detailed its reserve composition for the first time back in May 2021 after reaching a settlement with the New York Attorney General. The commercial paper initially accounted for a whopping 65.39% of its reserves. This raised many eyebrows since it was not known which companies issued it and which agencies actually rated them.
Since then, Tether had been gradually reducing its commercial paper holdings. Removing commercial paper allows Tether to alleviate concerns about the stability of its stability.
Tether had $20 billion in commercial paper in May. By late June, this sum was cut down to $8.5 billion. Earlier this month, Tether Chief Technology Officer Paolo Ardoino said that the company had reduced its commercial paper holdings to just $50 million.
In its blog post, Tether claims that its effort to remove commercial paper proves its commitment to ensuring that its stablecoin is backed by “the most secure reserves.”
As reported by U.Today, the court completed Tether to produce financial records that prove that the USDT token is backed by its reserves. The company, however, chose to downplay the significance of the court order, claiming that it was a “routine discovery matter.”
Tether remains the biggest stablecoin by market capitalization with a market cap of roughly $68 million.