Tether has released an attestation report showing that the USDT stablecoin reserves are “fully backed.”
Prepared by independent accountants MHA Cayman, the attestation also shows that Tether’s consolidated assets exceed liabilities, with consolidated reserves for issued USDT exceeding the amount needed to redeem these.
Less in commercial papers, more in US Treasury bills
According to the company’s assurance report, consolidated total assets as of 31 March stood at more than $82.4 billion. Tether’s circulating supply is 74,213,168,169, data on CoinGecko shows.
At the same time, Tether has reduced its commercial paper holdings, one of the key contestations that have over the last couple of years informed increased criticism of the stablecoin issuer.
Per its report, commercial paper holdings fell 17% over the last quarter, from $24.2 billion to $20.1 billion. Holdings in commercial paper have also fallen 20% since 1 April, statistics that will reflect in its Q2 report.
As Tether reduces the more illiquid commercial paper holdings, it’s moved to increase assets in money market funds and US Treasury bills. This has seen investments in T-bills jump 13%, from $34.5 billion to $39.2 billion.
Tether CTO reiterates that USDT is fully backed
With this report, Tether is telling the market that USDT is backed and that the stablecoin won’t collapse as TerraUSD (UST) did. That USDT reserves are accounted for and that the stablecoin will continue to maintain its dollar peg.
But is this enough to enhance the crypto community’s trust in USDT?
Three Arrows Capital co-founder and CEO Su Zhu says USDT’s $9 billion wipeout over the past week proves that indeed “USDT is redeemable” for USD. Some within the industry still don’t trust Tether’s word.
This proves the opposite, which is that USDT is redeemable, in size, for USD https://t.co/FI9Vk0LjFP
— 朱溯 🐂 (@zhusu) May 18, 2022
Paolo Ardoino, Tether CTO, commented on this aspect, noting:
“This past week is a clear example of the strength and resilience of Tether. Tether has maintained its stability through multiple black swan events and highly volatile market conditions and, even in its darkest days, Tether has never once failed to honor a redemption request from any of its verified customers.”
According to the Ardoino, the independent opinion indicates that USDT “is fully backed and that the composition of its reserves is strong, conservative, and liquid.”
Tether’s USDT is the largest and the most utilised US-dollar pegged stablecoin in the market today. It dominates the stablecoin market in terms of daily trading volume- CoinGecko shows that at the time of writing, USDT’s 24-hour volume was over $51.6 billion.
The next largest stablecoin is USD Coin (USDC), issued by Circle, a US-based Financial Services Company. USDC’s 24-hour trading volume was just over $7 billion on Thursday (12:10 pm ET).