📍 Las Vegas, NV, USA. on 23rd Oct 2022 at 00:00
2 mins read
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Major stablecoin issuer Tether has repeated that the company intends to totally remove itself from commercial paper backing for its United States dollar stablecoin, USDT. Tether maintains it holds 0% Chinese commercial paper.
In a recent blog post, Tether disclosed that it "no longer holds Chinese commercial paper," and that its overall exposure to commercial paper has decreased from $30 billion to $3.7 billion over the past year.
According to the statement, Tether aims to have no commercial paper assets by the end of October by late August 2022, when it expects its exposure to be as low as $200 million.
The major stablecoin issuer continues to make sure that its exposure to specific issuers or assets is contained in a diversified portfolio. The team behind Tether says its decrease in the commercial paper shows its commitment to the community.
Allegations on social media claim the stablecoin's portfolio of commercial papers is 85% backed by Chinese or Asian commercial papers. The piece was published in response to the ongoing fear, confusion, and doubt surrounding Tether. The crypto company initially denied the findings, saying that they were "absolutely false.
In its most recent blog post, Tether noted that the "greatest threat to the bitcoin sector that exists at the moment" is misleading news.
The hazard is comparable to that posed by scams, hacks, or cyberattacks since the dissemination of false information imperils not just the reputation of the sector but also the reputation of every individual in the community
In June, Paolo Ardoino, the chief technology officer of Tether, claimed that a "coordinated attack" on the USDT had been initiated by hedge funds trying to short-sell the stablecoin. Arduino claims that Tether has been collaborating with authorities to strengthen transparency programs and gradually lessen its vulnerability to commercial paper.
The stablecoin has worked to keep its dollar peg as the cryptocurrency market has deteriorated. During the peak of the meltdown in mid-May, it temporarily fell as low as 94 cents. Since then, USDT had traded at a discount to $1 for more than 60 days, although it had recently reclaimed that level.
The United States, United Kingdom, and Japan are among the nations that have made plans to regulate the stablecoin industry in the near future. A rule might mandate operators provide more information about the assets supporting their tokens, as well as subject them to the non-bank licensing systems already in place.