Tether Denies Rumors About Stablecoin Support
June 15, 2022Tether has officially disputed reports concerning its commercial paper holdings, stating that they are being spread to create panic and profit.
In a blog post on the company’s website, Tether addressed the claim that its commercial paper portfolio is 85 percent backed by Chinese or Asian commercial papers, which were trading at a 30 percent discount.
“These rumors are absolutely incorrect and are most likely being propagated to make more profits from an already strained market,” the statement said.
In addition, Tether said that it opposes such tactics, which frequently result in basic users suffering the most, while a few organized funders maximize their profits.
According to Tether, US Treasuries account for more than 47% of total USD reserves, while commercial paper accounts for less than 25% of USD backing.
The corporation stated that its commercial paper portfolio has been decreased from $20 billion at the end of Q1 2022 to $11 billion.
Tether said that this will fall to $8.4 billion by the end of June, before progressively declining to zero “without incurring any losses,” as expiring commercial papers “will be rolled into short-maturity U.S. Treasuries.”
Tether’s participation with the Celsius loan platform, which has contributed to troubles in the crypto markets after freezing withdrawals earlier this week, was also addressed in the news.
Due to being over collateralized, Tether reported selling its stake with Celsius while suffering no losses. Apart from a tiny investment in the company made with Tether equity, Tether declared having no exposure to Celsius.
The stoppage of Celsius withdrawals comes after several analysts warned that the lender was experiencing liquidity concerns. Even before the withdrawal freezes, the Celsius market capitalization had dropped by $290 million in May.
