Tether Clears the Air About the Composition of its Reserve Asset

Tether Holdings Ltd, the startup that issues the USDT stablecoin has come out again to debunk rumors bordering on the composition of its reserve asset. According to the company, it says it currently holds no Chinese Commercial paper as a part of its reserve assets.

The company criticized the spread of false news, and how much of a negative impact it can have on the global digital currency ecosystem. 

“The spreading of false information is the biggest threat to the cryptocurrency industry that currently exists. It is a threat of the same concern as scams, hacks, or cyberattacks because the spreading of false information risks not only the reputation of the industry but also each and every member of the community,” Tether said in an update released on Wednesday.

While it did not reveal the exact rumor, it was evident that it has something to do with how much Chinese Commercial paper the company holds, and the aftermath of a series of regulatory brawls it has had in the past. As a stablecoin issuer, Tether is obligated to keep a robust, stable, and easily accessible monetary reserve for every USDT coin in circulation.

Building Community’s Trust

The company said it has no Chinese Comercial Paper, and that its total commercial paper exposure has been cut down from the 30 billion it was sometime July last year to about 3.7 billion today. The firm expressed its commitment to cut down this exposure to approximately 200 million by the end of August, and by the end of November, reduce it to zero.

Tether said it decided to follow its community’s wishes with respect to cutting its commercial paper exposure, and it reiterated that it hopes to be as diversified as possible in its reserve assets composition.

“Tether continues to ensure that it has a diversified portfolio with limits to exposure on individual issuers or assets. Its reduction in commercial paper is a commitment to its community, the company said, adding that, “Tether is determined to lead the stablecoin market through the next wave of adoption and it will do so proudly regardless of critics and rumors.”

Stablecoin issuers including Circle have been under intense scrutiny since the collapse of TerraUSD (UST). Just like Tether, Circle also do all it can to douse tension, and it is trying to build trust and accountability by regularly publishing the composition of its USDC reserve base.