Tether Cuts Commercial Paper Reserves Allocation By 21%


Tether has slashed its commercial paper reserves allocation by over a fifth starting September through December 2021. The issue of USDT stablecoin cut its allocation from $30.5B to $24.16B.

Tether is bound legally to reveal its reserves every quarter starting February 2021. It is part of a hefty settlement when it had to pay $18.5M to the Attorney General’s Office in New York. This follows charges of misrepresentation of the specific sum of fiat currency backed USDT in 17-18.

The last attestation was done by MHA Cayman, based in the Cayman Islands. It provides a complete breakdown of the reserves held by Tether on 31 December.

According to the report, the consolidated assets exceed the consolidated liabilities, though the variance is minimal. While assets came to $78.67B, the liabilities were in the region of $78.53B.

Latest Assurance Opinion By Tether Reveals Reserves Held Exceeds Liabilities

But this slender margin of reserves held by Tether had a significant change ever since its preceding report started in late September. Bank and cash deposits slid to 4.187B, a drop of 42%. Its apportionment to the money market went up significantly by 200% to $3B.

Tether’s treasury bills also witnessed a healthy growth of 77.6% and stood at $34.52B.

The healthy amount of reserves held and backed by the commercial paper had touched 65.39% on May 21. This sparked onlooker criticism as they questioned the apparent opacity on the credibility of Tether as a destination for investment, and also the origins of the papers.

People also voiced their concerns that they could get uncovered to the crisis at Evergrande, through the holding of commercial papers. But Tether has denied the possibility of such an eventuality.

The commercial paper stands as a route used by big corporations to financial liabilities and payroll in the short term. It is a form of unsecured debt and doesn’t have any collateral backing.

The attestation of Tether reveals that commercial papers worth $13.93B hold a maturation opening of up to 90 days. For 91 to 180 days it is $9.94B while 181 to 365 days papers has a maturation window of $823M.

Commercial papers with maturation periods exceeding 270 have to be listed with the SEC.