- Tether has eliminated commercial paper from its reserves.
- U.S Treasury Bills (T-Bills) now make up the bulk of Tether’s reserves.
- Tether has been steadily decreasing exposure to commercial paper to enhance security and stability.
- The firm had committed to eliminating its commercial paper holdings in June.
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Tether, the firm behind the largest stablecoin in the world,& announced& today that it had completely eliminated commercial paper from its reserves. These reserves are responsible for backing USDT, the stablecoin issued by the firm.&
& The stablecoin issuer clarified in a& Twitter& thread that over $30 billion worth of commercial paper was eliminated without incurring any losses.&
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Tether increases exposure to T-Bills
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The stablecoin’s exposure to U.S Treasury Bills has increased by more than $10 billion in the past quarter and these T-Bills now account for the majority of the company’s reserves.&
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“This announcement comes as part of Tether’s ongoing efforts to increase transparency, with investor protection at the core of the management of Tethers’ reserves.” the firm said in a press release.&
& This move comes four months after the stablecoin issuer first& disclosed& its plans to bring its commercial paper holdings down to zero.
& While both Treasury Bills and Commercial Papers are short-term instruments, T-Bills are a much safer option given that they are guaranteed by the U.S Treasury Department, in contrast to commercial paper which is an unsecured short-term debt instrument issued by corporations.&
& Tether CTO Paul Adroino took to& Twitter& on 3 October to update the community on the firm’s reduced commercial paper holdings. Adroino revealed that the stablecoin’s reserves contained less than $50 million in commercial paper, compared to $8.4 billion at the beginning of July.&
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Concerns over Tether’s finances
& Tether has repeatedly emphasized its commitment to transparency regarding its reserves and security for its users.&
& Last month, a New York court& ordered the firm to furnish financial documents in order to shed light on the firm’s reserves and prove its claim of USDT’s 1-1 backing.&
& In the spirit of transparency and security, Tether& tapped& popular accounting firm BDO Italia in August this year, in order to carry out routine audits on the firm’s reserves and cash holdings.&
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