The creator of the largest stablecoin USDT, Tether, refutes claims regarding its commercial paper portfolio as rumors are now spreading around that 85% of it is backed by “Chinese or Asian commercial papers”.
As per the blog post, Tether even denies the allegations that its commercial paper portfolio is being traded at a 30% discount.
Commercial paper is a type of security issued by large corporations to pay for short-term debt obligations like inventory or payroll.
Tether revealed that its existing commercial paper portfolio has been decreased to 11 billion USD from 20 billion USD at the end of Q1 2022, and will be 8.4 billion USD by the end of June 2022.
Tether reported that US Treasuries now account for over 47% of total USD₮ reserves, with commercial paper accounting for less than 25% of the USD₮’s backing.
Tether Chief Technology Officer Paolo Ardoino tweeted that all the commercial paper exposure will gradually decrease to zero ‘without any incurrences of losses’.
Following this, the commercial papers that expire will be rolled into US Treasuries with a short maturity.
Ardoino dismissed rumors that Tether had lend exposure to Three Arrows Capital, a crypto hedge fund that was one of the Terra blockchain’s major investors. The firm is currently facing possible insolvency after incurring at least $400 million in liquidations.
Tether also revealed that apart from a tiny investment made out of Tether equity in the company, it has no ongoing exposure to the Celsius Network.
Apart from that Celsius’ position has been liquidated without any losses.
Celsius Network is currently under fire as two days back it paused withdrawals and transfers amid the current market conditions with no response from the team yet on what’s happening behind the scene.
Ardoinio tweeted “Pay attention and always ask yourself: who benefits from this,” regarding the uncertainty being spread in the community by these hedge funds.
