According to the Tether CTO, Paolo Ardoino, Tether plans to further reduce its exposure to commercial debt.
Tether’s reserves have been the subject of heated discussion for years, with some opponents suggesting that the stablecoin might be a huge Ponzi scheme.
For the first time, Tether published a breakdown of the reserves that backed its controversial USDT stablecoin in May of that year. The pie chart revealed that unspecified commercial paper was backed by 65.39% of the company’s reserves, a kind of short-term debt issued by companies to raise funds.
The revelation did nothing to ease concerns about USDT’s long-term viability since it was unclear whose firms provided the commercial paper that made up the majority of Tether’s reserves. Last September, the stablecoin issuer denied holding any commercial paper for Evergrande, the embattled Chinese real estate developer.
According to JPMorgan analysts, Tether is having difficulty finding a bank ready to accept deposits from the largest issuer based on the nature of its reserves.
The company announced in the fourth quarter that it had decreased its commercial paper holdings by 21% while significantly increasing its position in Treasury bills. Commercial debt represents less than a third of the company’s reserves at present.
