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Tether aims to reduce commercial paper risk to zero by 2022

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According to the report, Tether\’s official document \”Evolution of Tether Reserves\” pointed out that in 2022, Tether will reduce the risk of commercial paper to…

Tether aims to reduce commercial paper risk to zero by 2022

According to the report, Tether’s official document “Evolution of Tether Reserves” pointed out that in 2022, Tether will reduce the risk of commercial paper to zero, and there is no gap in the liquidity of USDT holders, and Tether has not shrunk. USDT now has more than 81% of cash and cash equivalents, including more than $39 billion of direct exposure to US treasury bond bonds, money market funds, reverse repurchase agreements, and cash and bank deposits. Tether said that although collateral was selected based on its conservative and liquidity nature, Tether’s reserves and operations had generated more than $700 million in net profits, which were added to Tether’s reserves, resulting in a total excess reserve of $960 million.

Tether: Tether has generated more than US $700 million in net profit

Interpretation of the news:


Tether’s official report titled “Evolution of Tether Reserves” has revealed that it plans to eliminate the risk of commercial paper by 2022. This move is expected to minimize the liquidity gap between USDT holders and Tether. The report also states that Tether has not reduced in size and currently holds more than 81% of cash and cash equivalents.

Tether has over $39 billion of direct exposure to US treasury bonds bonds, money market funds, reverse repurchase agreements, cash, and bank deposits. The report also highlights that the reserves are based on their conservative and liquidity nature. The reserves and operations have generated over $700 million in net profit, which have been added to Tether’s reserves, resulting in a total excess reserve of $960 million.

Commercial paper is a short-term debt of a company that does not require collateral and is typically unsecured. Most commercial paper is rated by rating agencies based on their creditworthiness. Tether’s recent decision aims to minimize the risk associated with holding commercial paper, which would typically translate to a lower credit rating.

Tether is one of the largest stablecoins, and its sustainability has been the subject of criticism. The company is known for having a close association with Bitfinex, a cryptocurrency exchange with which Tether has been accused of market manipulation. The company has also faced legal challenges concerning the backing of its stablecoin.

The report by Tether is timely given the increased scrutiny of stablecoins by regulators worldwide. Stablecoins have been viewed as a threat to financial stability, and regulators have been calling for stricter regulations. The report provides a sense of transparency for stakeholders and regulators regarding Tether’s reserves and operations.

In conclusion, Tether’s move to reduce commercial paper risk to zero by 2022 is a step in the right direction. The increased transparency provided by the report is a welcome development. As the stablecoin market grows, transparency and accountability will be significant factors in ensuring financial stability.

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