Tether’s cash and bank deposits fell 42 percent to $4.187 billion, while its money market fund allocation jumped 200 percent to $3 billion and its treasury bills increased 77.6% to $34.52 billion.
Between September and December of last year, Tether, the USDT stablecoin issuer, reduced its reserves allocation to commercial paper by more than a fifth, from about $30.5 billion to $24.16 billion.
As part of a $18.5 million court settlement with the Office of the New York Attorney General, Tether will be forced to publish its reserves every quarter starting in February 2021. In 2017 and 2018, the corporation was accused of misrepresenting the quantity of currency backing USDT.
Tether’s reserves were broken out as of 31 December 2021 in the latest attestation, which was completed by Cayman Islands-based Accountants MHA Cayman.
Tether’s “consolidated assets exceed its consolidated liabilities,” according to the report, although the difference is small, with total assets of $78.67 billion and liabilities of $78.53 billion.
Tether’s reserves have changed dramatically since its previous report in late September, with cash and bank deposits falling 42 percent to $4.187 billion, money market funds increasing 200 percent to $3 billion, and government bills increasing 77.6 percent to $34.52 billion.
Onlookers have questioned the lack of transparency surrounding the origins of the paper and its trustworthiness as an investment due to the substantial amount of commercial paper backing Tether’s reserves — which reached 65.39 percent as of May 2021. Last year, there were also concerns that Tether could be affected by the Evergrande issue due to commercial paper holdings, however Tether stated that this was not the case.
Large firms frequently issue commercial paper, which is used to fund payroll and short-term liabilities. Because it is frequently not backed by any sort of collateral, it is referred to as unsecured debt.
According to Tether’s attestation, the commercial paper worth $13.93 billion has a maturation window of 0-90 days, $9.94 billion has a maturation window of 91-180 days, and $823 million has a maturation window of 181 to 365 days. Any commercial paper with a maturity of more than 270 days (nine months) must be registered with the Securities and Exchange Commission in the United States (SEC).
USDT has a market cap of $79.47 billion, according to Coingecko statistics, while its biggest competitor USD Coin (USDC) has a market size of $52.7 billion.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.