According to its most recent reserve report, stablecoin issuer Tether has taken commercial papers out of its USDT reserve, as reported by Cryptoslate.
On October 13, Tether declared that it has reduced its holdings of commercial paper to zero and will instead put more money into short-term government debt and U.S. Treasury Bills. “Reducing commercial papers to zero demonstrates Tether’s commitment to backing its tokens with the most secure reserves in the market.”
Cryptoslate further noted that Tether claims that keeping its reserve in more safe investments will help the company become more transparent and provide better protection for investors’ money. Tether noted that by disclosing specifics about the USDT reserve in its quarterly attestation reports, it will increase its openness.
Tether has been under fire for not being transparent about the types of assets underlying the USDT stablecoin since 2017. It was reported in May that Chinese business papers accounted for 85% of Tether’s reserves. In rebuttal, Tether claimed that less than 25% of its reserve was made up of commercial paper, but it committed to reduce that percentage to zero by year’s end.
Tether said in July that it had reduced the size of its portfolio of commercial paper to a low of $3.5 billion from a prior high of $8.5 billion. After $3 billion of its holdings expired at the end of September, Tether announced that its commercial paper holdings were below $50 million.
(With insights from Cryptoslate)