Tether, the issuer of the world’s largest stablecoin, USDT, has said that it is still planning to get rid of its commercial paper used as backing for its stablecoin pegged to the US dollar. The company has also refuted claims that it holds Chinese commercial paper.
Tether denies holding Chinese commercial paper
Tether released a blog post on July 27 saying it does not hold any Chinese commercial paper. It also added that its exposure to commercial paper had been reduced significantly from $30 billion a year ago to $3.7 billion.
Tether says that by the end of next month, it plans to reduce its commercial paper exposure to $200 million, and it will have no commercial paper holdings by the end of October this year.
The statement from the company said that the stablecoin issuer was exploring having a diversified portfolio. It also planned to limit exposure to individual assets or issuers. By reducing the commercial paper, it was also committed to working with its community.
Concerns over Tether reserves
The blog post published by Tether comes at a time when the global cryptocurrency market has suffered the shock of several stablecoins depegging. Tether has been clouded in FUD over the past few months. Some of the claims said that USDT was 85% backed by Chinese and Asian commercial papers.
However, Tether has strongly denied reports of these allegations. In mid-June, the stablecoin issuer said the allegations were “completely false.” The company also stressed that it was reducing its commercial paper holdings to reduce the level of risk.
Tether also said that the false reports made in the cryptocurrency sector were the biggest threat to the industry. The company also added that there were many risks in the cryptocurrency space including scams, hacks and cybersecurity attacks. However, spreading false information was just as risky as it harmed the reputation of the crypto industry and members of the crypto community.
Last month, the Chief Technology Officer at Tether, Paolo Ardoino said that the USDT stablecoin was under a “coordinated attack” from hedge funds that wanted to short-sell the stablecoin hoping that it would depeg. He also said that the hedge funds were behind the FUD.
Ardoino further added that tether had been working with regulators to boost transparency in the cryptocurrency sector. It would also phase out any exposure to commercial paper to reduce USDT’s risk.
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