Tether Reduces Commercial Paper Holdings Almost 60% as It Tackles Quality Concerns

The USDT issuer's market cap has fallen to $66.1 billion from $82.2 billion in two months.

AccessTimeIconJul 1, 2022 at 2:34 p.m. UTC
Updated May 11, 2023 at 5:34 p.m. UTC

Stablecoin issuer Tether has cut its holdings of commercial paper by 58% to $8.5 billion, with a further reduction to $3.5 billion expected at the end of the month as it seeks to tackle speculation about the quality of support for its dollar-pegged USDT token.

  • The company held $20.1 billion of commercial paper in May.
  • According to an update on Tether's website, it aims to bring the figure down to zero as it diversifies its holdings into U.S. Treasury bonds.
  • Commercial paper is short-term unsecured debt issued by companies. Its value depends on the companies that issue it. The quality of Tether's holdings has been the subject of speculation, calling into question how much backing the company can count on for USDT.
  • Last month, Tether denied it had any exposure to Three Arrows Capital, the hedge fund that was reported to be insolvent, sparking concern about its financial ties to other crypto companies.
  • In May, Tether published an attestation of holdings by independent accountants MHA Cayman. The report stated that Tether held $39.2 billion in Treasurys.
  • It also had $4.1 billion in bank deposits, $6.7 billion in money market funds and $3.1 billion in secured loans.
  • The market cap of Tether's USDT stablecoin has plunged to $66.1 billion from $82.2 billion since May due to an increasing amount of user redemptions following the collapse of the algorithmic stablecoin terraUSD (UST).
  • Hedge funds are placing short positions on Tether worth hundreds of millions of dollars, the Wall Street Journal reported.
  • Tether Chief Technology Officer Paolo Ardoino was quick to dismiss any concerns, labelling the report on hedge funds shorting USDT as spreading "FUD" (fear, uncertainty and doubt).
  • 161 Letters of Support for Binance's CZ; Tether's Latest $200M Investment
    01:53
    161 Letters of Support for Binance's CZ; Tether's Latest $200M Investment
  • Why USDT Dominates Supply With Lower Transaction Volume
    01:11
    Why USDT Dominates Supply With Lower Transaction Volume
  • DOJ Wants CZ to Serve 3 Years in Prison; Tether to Freeze Wallets Evading Venezuelan Sanctions
    02:26
    DOJ Wants CZ to Serve 3 Years in Prison; Tether to Freeze Wallets Evading Venezuelan Sanctions
  • Polymarket Traders Bet on Fed Rate Cuts; Bitcoin Spot ETFs Register Five-Day Withdrawals Streak
    02:17
    Polymarket Traders Bet on Fed Rate Cuts; Bitcoin Spot ETFs Register Five-Day Withdrawals Streak

  • Disclosure

    Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

    CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

    Oliver Knight

    Oliver Knight is a CoinDesk reporter based between London and Lisbon. He does not own any crypto.


    Read more about