Tether first disclosed the reserve details: commercial paper accounted for more than 65%, BTC and other investments accounted for only 1.64%

Nearly three months after Tether reached a settlement with the New York State Attorney General’s Office and imposed an $18.5 million fine, Tether has finally disclosed its reserve breakdown.

Tether first disclosed the reserve details: commercial paper accounted for more than 65%, BTC and other investments accounted for only 1.64%

For the first time since its launch in 2014, stablecoin USDT issuer Tether has disclosed its reserve breakdown.

The breakdown shows that as of March 31, 2021, Tether’s reserve holdings consist of nearly 76% cash and cash equivalents as well as other short-term deposits and commercial paper.

Specifically, commercial paper makes up the majority of its cash and cash equivalents, with a 65% share. Trust deposits account for 24%, reverse repurchase notes for 3.60%, treasury bills for 3%, and actual cash for only 3.87%.

Tether first disclosed the reserve details: commercial paper accounted for more than 65%, BTC and other investments accounted for only 1.64%

Asked why actual cash is only a small portion of total reserves, Stuart Hoegner, Tether’s general counsel, said it is misleading to focus only on cash within the cash and cash equivalents category. “Readers should not confuse items that are not ‘actual cash’ with a lack of liquidity,” he said.

As for the details of the commercial paper, Hogner declined to name the counterparty “in accordance with standard business practice.

Another 25 percent of reserves
The rest of the reserves are divided into three categories. Secured loans (which do not include loans from affiliates) account for 12.55 percent of the total reserves; corporate bonds, funds and precious metals account for nearly 10 percent, and other investments (including digital currencies) account for 1.64 percent.

Hogner revealed that the mortgages were issued by Tether. Referring to the bond, fund and precious metals categories, he did not share further details. As for digital currencies, Hogner said he was referring only to Bitcoin.

“We’ve seen BTC become a significant part of the balance sheets of several large companies in the public and private markets. This helps diversify risk.” Hogner said, “Tether’s use of both BTC and other forms of investment is consistent with this approach.”

Tether had a market capitalization of $42.35 billion as of March 31, according to The Block data.

Tether’s Road to Transparency
When Tether launched, it initially claimed that each Tether (USDT) was backed 1:1 by U.S. dollars. in March 2019, the company updated its website to say that “all Tether tokens are 100% backed by Tether’s reserves.” The company later created a transparency page that listed the company’s assets and liabilities, measured in three currencies and gold. However, to this day, it does not give a detailed breakdown of these reserves.

Nearly three months after Tether settled with the New York State Attorney General’s office and imposed an $18.5 million fine, a breakdown of its reserves has finally been released.

“As part of our settlement agreement with the New York Attorney General’s Office, Tether proposes to release the reserve breakdown on an ongoing basis and commits to making that information available to the Attorney General’s Office and the public,” Hogner said.

Tether first disclosed the reserve details: commercial paper accounted for more than 65%, BTC and other investments accounted for only 1.64%

Tether has seen a surge in usage in recent months. Its official data shows that USDT now has a market cap of nearly $58 billion.

Last week, Tether’s adjusted on-chain transaction volume surpassed the $1 trillion mark for the first time. Note: On-chain transaction volume refers to any transfer of value within the blockchain network, including buying, selling and remitting.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/tether-first-disclosed-the-reserve-details-commercial-paper-accounted-for-more-than-65-btc-and-other-investments-accounted-for-only-1-64/
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