Tether introduces T-Bills and reduces commercial paper exposure to zero


  • The stablecoin issuer, Tether Holdings Limited, has lessened its exposure to commercial paper.
  • On October 13, Tether disclosed that it had removed the commercial paper from its reserves and had replaced those investments with US Treasury Bills.
  • According to information from CoinMarketCap, there are currently 68.4 billion tether currencies in circulation, up from 2 billion three years ago.

Tether Holdings Limited, the company that issues stablecoins, has reduced its exposure to commercial paper, resolving a long-standing issue with critics who have questioned the caliber of its reserves.

On October 13, Tether revealed that it had replaced those investments with US Treasury Bills in addition to eliminating commercial paper from its reserves. The company claimed that the elimination of commercial papers “demonstrates Tether’s commitment to backing its tokens with the most secure reserves in the industry.”

About 68.4 billion tether coins are currently in use, up from 2 billion three years ago, according to data from CoinMarketCap. The market value of the cryptocurrency is $68.4 billion.

Commercial paper is a short-term, unsecured financial instrument issued by businesses; it is seen as less trustworthy than Treasury notes. According to Paolo Ardoino, Tether’s Chief Technology Officer, 58.1% of its assets were in T-bills as of October, up from 43.5% in June. The exact number is unknown, however, Ardoino did mention in a post on Thursday that Tether was able to pay $7 billion, or 10% of its reserves, in less than 48 hours.

While Tether’s reserves have long been the subject of public scrutiny, its critics have concentrated on the makeup of its assets throughout the previous year. For example, Bloomberg opined in October 2021 that Tether might have excessive exposure to Chinese commercial debt at a time when China Evergrande Group, one of the nation’s top property developers, was on the verge of bankruptcy.

Tether had to pay a sizable fine after a legal dispute with the New York attorney general’s office last year over questions over the viability of its reserves. In May, terraUSD (UST), formerly one of the most popular stablecoin projects, collapsed, causing tens of billions of dollars in damages to investors.

The larger crypto ecosystem is impacted in a cascading manner by the failure of UST. One of the effects was that Tether temporarily lost its dollar peg and fell as low as 95 cents.