Tether reduces commercial paper exposure to zero to build greater trust, transparency and stability in its stablecoin reserves.
Tether Backs Stablecoin With US Treasury Bills
Crypto’s largest stablecoin, Tether, has announced it has eliminated commercial paper from its reserves, replacing these investments with U.S. Treasury Bills (T-Bills).
This is a step towards even greater transparency and trust, not only for Tether but for the entire stablecoin industry, said Tether in a statement.
Back in May, when the TerraUSD stablecoin collapsed, Tether briefly lost its peg to the U.S. dollar. At the time, industry analysts and regulators had expressed concern about Tether having about 36% of its reserves in commercial paper, a form of unsecured debt with a higher risk of default.
In a bid to build to assure investors and regulators, both Circle and Tether committed to reduce their exposure to commercial paper to zero by the end of the year, and also committed to regular attestations of their reserves by a big-name accounting firm.
Regulators have long been calling for action on stablecoins, given their importance and size in the crypto markets. Since then, Tether has been keen to build greater confidence in its token, as it looks to protect its market share, which is nearly half of the total stablecoin market cap of $149 billion. Tether now holds about $40 billion in Treasuries with the yield on 10 year T-bills currently at around 4%.
Source : bsc.news
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