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The issuer of USDT Stablecoin, Tether, announced that it had reduced its reserves for commercial paper placements and increased its reserves for U.S. Treasury bills in the first quarter of 2022.
In a Thursday blog post, Tether reported its reserves were “fully backed,” seemingly in an effort to assuage many users’ fears around USDT briefly depegging from the dollar on May 12. On the transmitter of stablecoin, its commercial paper holdings fell 17% in q1 2022 from approximately $24 billion to $20 billion, an additional 20% reduction will be reflected in their next quarterly report. Tether also increased its investment in money market funds and U.S. treasury bills by 13% in the same quarter, from approximately $34.5 billion to $39 billion.
Tether has maintained its stability due to multiple black swan events and very volatile market conditions, even in his darkest days, tether has never once failed to honour a claim for reimbursement of its verified customers," said paolo ardoino, technical director of tether. This latest statement highlights once again that Tether is fully supported and that the composition of its reserves is strong, conservative and liquid.“
Assurance Opinion Once Again Re-affirms Tether’s Reserves Fully Backed; Reveals Significant Reductions in Commercial Paper and Increase in U.S. Treasury Bills https://t.co/8qVSQFQBeY
— Tether (@Tether_to) May 19, 2022
As part of an $18.5 million settlement with the Office of the New York Attorney General in February 2021 — in which authorities alleged the firm misrepresented the degree to which its USDT stablecoins were backed by fiat collateral — Tether has to declare her reserves quarterly. In February, the company reported it had cut its reserves allocation to commercial paper in Q4 2021 from roughly $30 billion to $24 billion, a 20% decrease.
Related: The United States turns its attention to stablecoin regulation
With a market capitalization of more than $74 billion at the time of publication, USDT exceeds Tether’s reported reserve assets at more than $82 billion. During the extreme volatility in the crypto market over the last two weeks, Tether reiterated that it would “honour all redemptions from verified customers” for USDT, seemingly in an effort to prove the asset was as stable as its namesake.
