According to a tweet from Tether Chief Technology Officer Paulo Ardoino, Tether Holdings Limited, the issuer of the world’s biggest stablecoin USDT, cut its commercial paper holdings to less than $50 million as of September 30.
Ardoino also said in the tweet that Tether has boosted its holdings of U.S. Treasury notes to 58.1% of its whole portfolio, up from 43.0% on June 30.
Stablecoins are cryptocurrencies whose value is tied to that of an underlying asset, such as the U.S. dollar, by owning assets with a market capitalization equal to or larger than that of the cryptos. As a result, stablecoin issuer holdings are examined closely to guarantee that they are actually fully supported. With a market value of $67.9 billion, USDT is the most valuable stablecoin globally.
Treasury bills are regarded to be more stable than commercial paper due to their “zero default risk” and guaranteed buying price. Commercial papers are short-term financial instruments issued by corporations to boost finance.
Tether has been lowering its commercial paper holdings for some time, dropping its holdings by 21% in Q4 2021 and announcing in June that it intends to decrease its commercial paper holdings to zero and own an equal amount of U.S. Treasury bills. The company’s commercial paper reserves have decreased from 20 billion units in Q1 2022 to 8.4 billion units in Q2 2022.
The U.S. Securities and Exchange Commission said last week that it had filed and resolved a $1 million punishment against Tether’s previous auditing company, Friedman LLP, for “serious breaches of federal securities laws.”
A February 2021 deal with the New York State Attorney General requires Tether to provide quarterly reserve reports. The company said in August that it will collaborate with the accounting firm BDO Italia to create similar reports in the future.