- Tether has denied rumors that 85% of its commercial paper portfolio is backed by bad Chinese real estate loans.
- The firm said the US Treasury made up 47% of its reserves and commercial paper was less than 25%.
- Tether also denied contact with bankrupt crypto lender Celsius and potentially bankrupt hedge fund, Three Arrows Capital.
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Stablecoin issuer Tether has dismissed rumors about its commercial paper portfolio as “completely false and potentially spread to create further panic”.
Tether denounces false support rumors
Tether is once again denying rumors about support for its USDT stablecoin.
Wednesday morning blog post, the industry’s largest stablecoin issuer, addressed rumors that its “commercial paper portfolio is backed by 85% Chinese or Asian commercial paper and is being traded at a 30% discount.” It said the allegations are “totally false” and could potentially be spread to create more panic and make profits.
Referring to its latest assurance opinion from March, Tether highlighted that more than 47% of reserves backing its USDT stablecoin include the US Treasury, which is widely regarded as one of the safest financial instruments for investment. considered to be one of In contrast, commercial paper – a form of short-term unsecured corporate debt – reportedly made up less than 25%.
Tether CTO, Paolo Ardoino, who often serves separately as the firm’s primary spokesperson Having said on Twitter that Tether has reduced its commercial paper holdings by 50% since March 31 and that by the end of June, its exposure to corporate debt will be only $8.4 billion. Addressing the rumors more directly, he wrote, “It’s crazy how much interested FUD has been spread by hedge funds [in causing] More hell to make a few extra bucks. ,
Concerns about Tether’s commercial paper portfolio surfaced last December when Bloomberg ran a report claiming that a significant portion of the firm’s stablecoin reserves were backed by short-term loans from Chinese real estate firms. At the time, financial markets were in panic over potential bankruptcy. evergrande, China’s largest real estate developer. Tether denied holding any Evergrande loans and dismissed the report as “misinformation”.
In today’s blog post, the stablecoin provider also denied that it had risks. three arrow capitalOne of the foremost crypto hedge funds, is now rumored to be insolvent. It denied any current exposure to the now bankrupt crypto lender Celsius, apart from a small investment made from Tether equity in the company. “The Celsius position has been terminated without any loss to Tether,” the firm wrote on Wednesday, adding that its lending activities with Celsius and other borrowers have always been more collateralised.
Tether’s USDT stablecoin has maintained parity with the dollar, despite significant market volatility in recent days.
Disclosure: At the time of writing, the author of this article owns ETH and several other cryptocurrencies.