The stablecoin issuer announced its intentions of removing all commercial paper from its reserves last month as it countered rumors, and it remains on schedule so far.
Tether is reducing its commercial paper holdings on pace with plans, the stablecoin company reported Friday. It has reached the target sum of $8.4 billion in commercial paper, as per intentions first disclosed last month, and will continue to reduce its holdings in the immediate future.
On July 31, $5 billion of Tether’s commercial paper holdings will expire, leaving the company with $3.5 billion dollars’ worth in its portfolio. As a result, treasury reserves will make up a larger proportion of the company’s reserves, the report emphasized.
Tether stablecoin USDT had about $20.1 billion in commercial paper backing as of March 31. The company’s quarterly assurance opinion stated that the percentage of commercial paper in its reserves was falling and its reserves were fully backed.
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The stablecoin became depegged for a brief time in May amid broad market turbulence. On June 15, two days after cryptocurrency lending platform Celsius announced it was halting withdrawals, Tether issued a statement to refute rumors that 85% of that portfolio was Asian and Chinese commercial paper trading at a significant discount. Tether stated at that time that it had a goal of reducing its commercial paper portfolio to zero. The USDT market cap fell to an eight-month low, at below $70 billion, a few days later.
I have been open about the attempts from some hedge funds that were trying to cause further panic on the market after TERRA/LUNA collapse.
It really seemed from the beginning a coordinated attack, with a new wave of FUD, troll armies, clowns etc. https://t.co/hhcsgHV1Ow
— Paolo Ardoino (@paoloardoino) June 27, 2022
Those are not all of Tether’s stability woes, however. Tether chief technology officer Paolo Ardoino said in a long Twitter thread Monday that the stablecoin was “under attack” from hedge funds. He went on to say the same hedge funds “believed and helped all the FUD spread by the truthers in the past months [and] years.”