The major stablecoin company Tether is looking to eventually get rid of commercial paper backing for its U.S. dollar-based stablecoin Tether (USDT).
Tether issued an official statement on Wednesday to deny reports alleging that Tether’s commercial paper portfolio is 85% backed by Chinese or Asian commercial papers and is being traded at a 30% discount.
The stablecoin firm called such allegations “completely false,” reiterating that more than 47% of total USDT reserves are now the “United States Treasuries.” In its latest assurance opinion issued in May, Tether reported that commercial paper makes up less than 25% of USDT’s backing, amounting to around $21 billion as of March 31.
USDT’s backing asset breakdown. Source: Tether’s assurance opinion released in May 2022
According to the latest statement, Tether has continued to reduce its current portfolio of commercial paper, decreasing its volumes to $11 billion. The firm expects to further reduce it to $8.4 billion by the end of June 2022, eventually aiming to clear out its commercial paper backing, the statement reads:
“This will gradually decrease to zero without any incurrences of losses. All commercial papers are expiring and will be rolled into U.S. Treasuries with a short maturity.”
Tether also once again mentioned the recent crisis of the Celsius lending platform, noting that Celsius position has been liquidated with no losses to Tether. “Tether has currently zero exposure to Celsius apart from a small investment made out of Tether equity in the company,” the firm said.
Tether also argued that reports suggesting that Tether has lending exposure to the crypto venture capital firm Three Arrows Capital are also “categorically false.”