Tether Holdings Ltd. denied rumors that its Tether (USDT) token was backed to 85% by Chinese or Asian commercial paper. They denied rumors that it is still using Chinese commercial paper. According to reports, Tether Holdings Ltd. revealed that there is no Chinese commercial paper in the reserves supporting its $66 billion stablecoin, indicating that the company issuing the most popular cryptocurrency does not own the contentious assets for the first time.
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Tether claims that its exposure to commercial paper has decreased significantly over time, from $30 billion at the start of the month to $3.7 billion. Tether’s exposure to commercial paper has been steadily decreasing in favor of holding US Treasury bills to eliminate all paper holdings by the beginning of November.
Tether’s Reserve for Commercial Paper
Following the failure of the Terra UST stablecoins, the long-term viability of various stablecoins is being assessed. Tether now faces the challenge of refuting claims that its reserves rely heavily on Chinese commercial paper. Tether hasn’t officially denied that it doesn’t have any commercial paper reserves. However, the criticism of Tether focuses on its 50% reserve of commercial paper. According to the report, there is a 50 percent exposure to Chinese commercial paper.
Tether Faces Allegations
Following the collapse of the Terra UST stablecoins, the long-term viability of various stablecoins is being evaluated. Tether is now facing allegations that its reserves rely heavily on Chinese commercial paper. On the other hand, Tether has not formally denied a lack of commercial paper reserves. Instead, the Tether is chastised for keeping a 50% reserve of commercial paper. According to the report, there is a 50% exposure to Chinese commercial paper, which is significant.
The previous year, Tether Holdings Ltd. demonstrated extensive exposure to international papers, which was necessary at the time. However, the existence of a partnership between Tether and some Asian corporations involving billions of dollars in unspecified loans has long been the subject of persistent rumors.
Tether denied last month that a significant portion of its commercial paper was sourced from Chinese firms. It did not, however, provide any additional information about its interactions with Asian firms. It has instead stated that it is working to reduce the amount of commercial paper in its reserves.