Tether, the issuer of USDT, the world’s most traded stablecoin, said it doesn’t hold Chinese commercial paper in its reserves and it plans to reduce its commercial paper holdings overall.
See related article: Tether slashes commercial paper, shows more reserves than liabilities
- In a statement published on Wednesday, Tether said it “holds no Chinese commercial paper as of today,” and it has brought down its total commercial paper exposure to about US$3.7 billion from US$30 billion in July 2021.
- A Bloomberg investigation published in October alleged that Tether had made out short-term loans to large Chinese companies from its reserves.
- When concerns emerged last year over the future of Chinese property giant Evergrande after it was hit with a debt crisis, Tether said it did not hold any commercial paper issued by the developer.
- In June, Tether denied rumors that its commercial paper portfolio was 85% backed by Chinese or Asian commercial papers.
- Tether has been reducing its commercial paper holdings to bring down the risk profile of its token’s backing, and it plans to cut the holding of the assets to zero by early November.
- Tether has been caught in a slew of troubles for the past few years. It was ordered to issue quarterly reserve reports by the New York State Attorney General in February 2021 as part of a US$18.5 million settlement.
See related article: Nearly half of Tether reserves are now in US Treasury bills