Tether, the company behind the USDT stablecoin, has reduced its commercial paper holdings in line with its plans for the same. In an announcement released on July 1, Tether said it had reached the targeted amount of $8.4 billion in commercial paper holdings.
Tether reduces commercial paper holdings
Tether’s plan to reduce its commercial holdings was announced last month, with the company promising to reduce its holdings soon. By the end of this month, it is expected that $5 billion worth of Tether commercial paper holdings will expire. This will leave the company with a portfolio worth $3.5 billion.
With this reduction, Tether noted that its reserves will be mainly comprised of treasury reserves. The USDT stablecoin had around $20.1 billion worth of commercial paper backing as of March 31.
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According to the company’s quarterly assurance opinion, the share of commercial paper within the company’s reserves had dropped, but the reserves were fully backed. These assurances come amid dampening investor faith in stablecoins following the collapse of several stablecoins such as TerraUSD (UST).
USDT depegged briefly in May after the collapse of Terra LUNA and the UST stablecoin. In mid-June, Tether released a statement addressing rumors of its reserves, mainly made up of Asian and Chinese commercial papers that were now trading at a discount. At the time, Tether released a statement saying it was working on getting rid of all its commercial paper holdings. Last month, the USDT stablecoin’s market cap dropped to an eight-month low of below $70 billion.
Tether CTO claims hedge funds were shorting USDT
The CTO of Tether, Paolo Ardoino, recently claimed that some traditional hedge funds had been shorting USDT. He said the hedge funds were behind the spread of false rumors against the stablecoin to make it depeg.
Ardoino even claimed that some hedge funds had taken loans to short the stablecoin. The hedge funds were capitalizing on the claims that USDT is not fully backed, and exerting pressure on the coin would force the coin to depeg. However, the coin has managed to hold despite increased redemptions.
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