During a recent Spaces Twitter event discussing Stablecoin and the recent volatility of cryptocurrencies, Tether CTO Paolo Ardoino said that the company has halved the amount of commercial paper backing their Stablecoin. It’s worth repealing that Ardoino is also the technical director of cryptocurrency exchange Bitfinex.
In the last six months, [Tether] has reduced the amount of commercial paper by 50%. Everything we took out of commercial paper has been transferred to US Treasury securities,” he said.
In the next few weeks, we will have a new attestation that will show that the amount of these commercial paper continues to decline.
Commercial paper is a type of security issued by large corporations to pay short-term debt obligations, such as inventory or payroll.
The Spaces event was attended by others from the crypto industry, including Samson Mou of Jan3 and Adam Back of Blockstream. Also in attendance was Michael Soutart, the US Senate candidate from Kansas.
Tether (USDT) is the industry’s largest stablecoin in terms of market capitalisation and is backed by various financial assets.
According to Tether’s transparency report, USDT is backed by cryptocurrencies, loans, corporate bonds, precious metals, cash and cash equivalents.
Tether’s latest official attestation shows that cash, cash equivalents, short-term deposits and commercial paper account for 83.74% of all Tether stackable coins traded on the market.
Of this number, commercial paper and certificates of deposit account for almost 37%, while treasury bills account for about 52%. The 37% figure relates to December, so in light of Ardoino’s comments about a 50% reduction in six months we can only assume that the figure is now 18.5%, but this cannot be certain given the lack of data.
Tether is notorious for the opacity of its operations and has repeatedly refused to be publicly audited by major accounting firms.