Tether Reportedly Plans to Eliminate Commercial Paper Risk by 2022

02/16/2023 12:51 • Metaverse Matters • 140 views

According to the report, Tether’s official document “Evolution of Tether Reserves” pointed out that in 2022, Tether will reduce the risk of commercial paper to zero, and there is no gap in the liquidity of USDT holders, and Tether has not shrunk. USDT now has more than 81% of cash and cash equivalents, including more than $39 billion of direct exposure to US treasury bond bonds, money market funds, reverse repurchase agreements, and cash and bank deposits. Tether said that although collateral was selected based on its conservative and liquidity nature, Tether’s reserves and operations had generated more than $700 million in net profits, which were added to Tether’s reserves, resulting in a total excess reserve of $960 million.

Tether: Tether has generated more than US $700 million in net profit

Interpret the above information:

Tether, a stablecoin that aims to maintain a 1:1 ratio with the US dollar, recently released a report detailing the evolution of its reserves. The report highlighted Tether’s plan to mitigate the risk associated with commercial paper by reducing it to zero by 2022. This move is aimed at assuring USDT holders that there will be no liquidity gaps in the future.

According to the report, Tether currently has more than 81% of its reserves in cash and cash equivalents. These reserves amount to over $39 billion in direct exposure to US treasury bonds, money market funds, reverse repurchase agreements, and cash and bank deposits. Despite the conservative nature of the selected collateral, Tether’s reserves and operations generated over $700 million in net profits. These profits have been added to Tether’s reserves, resulting in a total excess reserve of $960 million.

Tether’s decision to eliminate commercial paper risk comes after investors raised concerns about the stability of the stablecoin. Commercial paper is a short-term debt instrument that companies issue to finance their operations. However, it is considered risky, especially during economic downturns. Tether’s move to eliminate this risk is expected to provide assurance to USDT holders and improve market confidence.

Tether’s report comes at a time when stablecoins are gaining popularity, with many investors opting for them over traditional cryptocurrencies. This is because stablecoins offer the benefits of traditional cryptocurrencies, such as fast settlement time and low transaction costs, while eliminating the volatility associated with the crypto market. As a result, there has been a surge in the issuance of stablecoins, with Tether being the most popular stablecoin, accounting for over 80% of the total market share.

Overall, Tether’s report shows that the company is committed to maintaining the stability and liquidity of its stablecoin. By reducing commercial paper risk to zero by 2022, Tether is taking a significant step towards providing assurance to USDT holders and improving market confidence.

In conclusion, the keywords for this message are Tether, USDT, liquidity, commercial paper, and collateral. The message reports on Tether’s plan to eliminate commercial paper risk and maintain the stability and liquidity of its stablecoin. The move is aimed at assuring USDT holders and improving market confidence in stablecoins.

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Tether Reportedly Plans to Eliminate Commercial Paper Risk by 2022

Tether: Tether has generated more than US $700 million in net profit

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