Tether Reduces Commercial Paper Holdings Almost 60% as It Tackles Quality Concerns
Crypto exchange Tether
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Tether Reduces Commercial Paper Holdings Almost 60% as It Tackles Quality Concerns
- Stablecoin issuer Tether has cut its holdings of commercial paper by 58% to $8.5 billion, with a further reduction to $3.5 billion expected at the end of the month as it seeks to tackle speculation about the quality of support for the dollar-pegged USDT token.
- According to an update on Tether's website, it aims to bring the figure down to zero as it diversifies its holdings into S. Treasuries.
- Commercial paper is short-term unsecured debt issued by companies. Its value depends on the companies that issue it. The quality of Tether's holdings has been the subject of speculation, calling into question how much backing the company can count on for USDT.
- Last month, Tether denied it had any exposure to Three Arrows Capital, the hedge fund that was reported to be insolvent, sparking concern about its financial ties to other crypto companies.
- It also had $4.1 billion in bank deposits, $6.7 billion in money market funds and $3.1 billion in secured loans.
- The market cap of Tether's USDT stablecoin has plunged to $66.1
Tether, the token of a volatile stablecoin that has been tangled in controversy over whether it can really be used as money, cut its commercial paper holdings by almost 60 percent as it looks to limit risks.