The majority of its holdings ($39.2 billion) were in U.S. Treasury bills as of Dec. 31, according to an attestation from BDO. The rest of its $67 billion of assets were distributed across money market funds, cash and other items. Secured loans were reduced by $300 million, in line with a plan to reduce them to zero this year.
Tether had set a goal for eliminating commercial paper – a type of short-term, unsecured debt – by the end of 2022, which it met.
The quality of the holdings backing stablecoins came under greater scrutiny last year following the collapse of algorithmic stablecoin terraUSD (UST), which had a market capitalization of $18 billion prior to its downfall. Tether first published a breakdown of its reserves in May 2021, revealing that 49% of its assets were backed by commercial paper. Subsequent attestation reports showed a gradual decline in the proportion of commercial paper on Tether's books.
UPDATE (Feb. 9, 2023 12:39 UTC) : Adds commercial paper holdings to first paragraph, background on stablecoin scrutiny in second, further details starting in third.
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