Tether has a reserve of 82.4 billion USD, confirming that it is “excessive” to guarantee stablecoin USDT

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2022-05-19 20:32:48

Tether, the company behind the stablecoin USDT, recently launched Report on asset certification for the first quarter of 2022 before the deadline of May 20, the commitment is still “excessive” to guarantee the 78 billion USDT circulating in the market.

Tether has a reserve of 82.4 billion USD, confirming that it is “excessive” to guarantee stablecoin USDT

The largest stablecoin in the USDT market once dropped to $0.95 on May 12. Not only “catching the trend” and losing the peg from the domino LUNA-UST, but this coin has long been questioned about the “security asset”. Total supply evaporated 7 billion USD in just one week, Tether soon faced a wave of calls for “audit”. Until now, this organization has officially responded. As a result, they are still committed to holding more reserves than they need to “take care” of the fate of USDT.

The asset attestation report was prepared by MHA Cayman, a lesser-known auditing firm based in the Caribbean Cayman Islands – close to Tether’s headquarters in the British Virgin Islands. Both are known as tax havens with lax financial laws. This is the 4th report published by the company, after the previous three times in March 2021, June 2021 and December 2021.

Accordingly, as of March 31, 2022, Tether has total assets of 82.4 billion USDwhich consists of 86% cash and cash equivalents, the remainder being $4 billion in corporate bonds, $3 billion in secured loans (down $1 billion) and $5 billion in investments crypto.

About 86% of cash and cash equivalents included $4 billion in cash and bank deposits, 52% of US Treasury bonds and 37% of commercial paper.

Tether Asset Report March 2021

With what has been reported, Tether continues to assert that it can completely guarantee the value of the issued USDT, which is like a “money printing machine”:

  • Total consolidated assets reached at least 82,424,821,101 USD.
  • The consolidated assets of the group exceed the consolidated liabilities.
  • Reserves in excess of the amount required to back the stablecoin.
  • The average time to maturity decreased significantly, focusing on short-term assets.

Tether CTO Paolo Ardoino said:

“The past week has been a testament to the rapid recovery of Tether. BILLIONether has maintained its stability through numerous black swan dominoes. This demonstrates the company’s commitment to reducing its investments in commercial paper.”

Commercial paper is short-term, unsecured debt issued by a company. They dropped 16.8 percent from $24.2 billion to $19.9 billion in commercial paper used to support the issuance of stablecoins. Tether has also dropped another 20% since April 1st, this drop has not been mentioned in the official statement and they will reflect them in the next Q2 report.

Source: Tether.io

Tether continued to pledge “an additional 20% reduction in commercial paper” amid concerns that short-term loans could be linked to Chinese real estate. “The growth of Tether in today’s market continues to confirm the company is in a very healthy business,” Ardoino commented.

However, recent data shows that Tether’s market capitalization has dropped 11% since the Terra stain. The timely release of the quarterly report is an extremely important move to strengthen trust and commitment to transparency among the public.

Bloomberg Posted a shocking report last October, most of Tether’s commercial paper is issued by large Chinese companies, leading some analysts to worry about the quality of the reserves. Tether then even hid the identities of these organizations.

Additionally, the average rating of Tether’s commercial paper and certificates of deposit has increased from A-2 to A-1 since Final report in December 2021. As reported by Latham & Watkins, A-1 is ratings highest for short-term debt instruments, indicating that Tether can hold the highest quality liquidity available.

This rating equivalent with Goldman Sachs, GlaxoSmithKline and Walt Disney. The report describes that Tether is not only fully backed, but also holds more capital than is needed to redeem the USDT in circulation.

Currently, the market capitalization of USDT is around 74 billion USD, according to CoinGecko.

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