Tether, the crypto firm behind the USDT stablecoin, on Monday, Announced which has increased its holding of US Treasuries to 58.1% of its total portfolio, while reducing its holding of commercial paper to less than $50 million. Tether CTO Paolo Ardoino revealed the matter via Twitter social media.

Mr. Ardoino revealed that on September 30, Tether increased its holdings of US Treasury bills to now represent 58.1% of the Tether stablecoin issuer’s reserves, an increase of 14 percent. % with respect to the previous position. As of June 30, the company’s US Treasuries represented 43.5% of its total portfolio.

In July, Tether clarified that it “has no Chinese commercial paper” and said its total commercial paper exposure had shrunk to $3.7 billion from $20.1 billion in May this year. During that time, Tether said it would completely divest commercial paper backing for its US dollar stablecoin USDT by the end of the year, as part of a plan to reduce exposure to riskier assets.

His statement came as a response to the ongoing FUD around Tether, with some reports alleging that Tether’s commercial paper portfolio was 85% backed by Chinese or Asian commercial paper. Tether refuted such reports and stated that such allegations were completely false.

Stablecoins came under increased scrutiny after the TerraUSD token crash in May. Typically backed by reserves of assets such as the US dollar, gold, and government debt, stablecoins are widely used in cryptocurrency trading. Tether’s reserves consist of commercial paper (short-term debt issued by companies) and US Treasury bonds.

Since the fourth quarter of 2021, Tether has pledged to reduce its commercial debt holdings in its reserves, as the crypto firm continues to face questions about the actual backing of its digital currency.

There has been controversy over the claims made by Tether and its reservations. Last year, Tether revealed that he had some cash, but also bought a large amount of commercial paper, which is short-term corporate debt. This raised concerns given that Tether does not disclose which companies it holds commercial paper for and where those entities are headquartered.

Last year, the US Commodity Futures Trading Commission (CFTC) fined Tether $41 million for “making false or misleading statements” that its USDT stablecoin was backed. 100% for the corresponding fiduciary currencies. Last month, a New York judge ordered Tether to provide evidence of USDT’s backing of its reserves.

The crypto firm aims to zero out its commercial paper holdings, as part of efforts to address concerns about the quality of the assets underpinning its stablecoin amid the crypto market crash. In July, Tether revealed that it hired the accounting firm BDO Italia to certify its reserves and that it would aim to publish monthly reports by the end of the year.

Image Source: Shutterstock