Tether released an attestation showing that USDT stablecoin reserves are “fully backed”. Prepared by independent accountants MHA Cayman, the attestation also shows that Tether’s consolidated assets outweigh its liabilities, with the consolidated reserves for USDT issued exceeding the amount needed to redeem them.
Less in commercial paper, more in US Treasuries
According to the company’s collateral report, total consolidated assets as of March 31 were more than $82.4 billion. Tether’s circulating supply is 74,213,168,169, data from CoinGecko shows. At the same time, Tether has reduced its holdings of commercial paper, one of the main challenges that in the last two years has generated increasing criticism of the stablecoin issuer. According to its report, commercial paper holdings dropped 17% in the last quarter, from $24.2 billion to $20.1 billion. Commercial paper holdings have also dropped 20% since April 1, statistics that will be reflected in its second-quarter report. As Tether reduces holdings of more illiquid commercial paper, it increases assets in money market funds and US Treasuries. This caused investments in Treasury bills to increase by 13%, from US$34.5 billion to US$39.2 billion.
Tether CTO reiterates that USDT is fully supported
With this report, Tether is telling the market that USDT is supported and that the stablecoin will not collapse like TerraUSD (UST). That USDT reserves are accounted for and that the stablecoin continues to maintain its peg to the dollar. But is that enough to boost the cryptocurrency community’s trust in USDT? Three Arrows Capital co-founder and CEO Su Zhu says last week’s $9 billion USDT loss proves that, indeed, “USDT is redeemable” for USD. Some in the industry still don’t take Tether’s word for it.
This proves the opposite, which is that USDT is redeemable, in size, for USD https://t.co/FI9Vk0LjFP — Zhu Su 🔺🌕 (@zhusu) May 18, 2022
Paolo Ardoino, Tether CTO, commented on this aspect, noting: “This past week is a clear example of Tether’s strength and resilience. Tether has maintained its stability through various black swan events and highly volatile market conditions, and even in its darkest days, Tether has never failed to honor a redemption request from any of its verified clients.” According to Ardoino, the independent opinion indicates that the USDT “is fully backed and that the composition of its reserves is strong, conservative and liquid”. Tether’s USDT is the largest and most widely used dollar-pegged stablecoin on the market today. It dominates the stablecoin market in terms of daily trading volume – CoinGecko shows that at the time of writing, USDT’s 24-hour volume was over $51.6 billion. The next largest stablecoin is USD Coin (USDC), issued by Circle, a US-based financial services company. USDC 24-hour trading volume was just over $7 billion on Thursday (12:10 pm ET).
