- Tether (USDT) announced the elimination of commercial papers from its reserves.
- Regulators had previously raised concerns about the reserves of the USDT, the world’s most-traded cryptocurrency.
- Tether (USDT) had been consistently reducing its commercial paper reserves over the past few quarters.ย
- The protocol has recently taken steps to counter cyber exploitation.
Tether has eliminated commercial paper from its reserves, the asset-backed stablecoin issuer announced in its latest blog post.
A commercial paper is a short-term, unsecured debt issued by a company. Regulators had previously criticized Tether for not being clear enough about what constitutes the reserves backing USDT, the world’s most traded cryptocurrency. As a result of today’s move, the company hopes to have addressed those concerns.
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โReducing commercial papers to zero demonstrates Tetherโs commitment to backing its tokens with the most secure reserves in the market,โ The Tether team mentions in the blog. โThis is a step towards even greater transparency and trust, not only for Tether but for the entire stablecoin industry.โ
Over the past few years, Tether has expended significant effort to be at the forefront of enhancing transparency in the cryptocurrency industry. The company typically releases attestations every three months, and regularly reviews the makeup of its reserves.
In July, Tether updated its community on its progress in reducing its commercial paper portfolio to $3.5B, in line with its stated commitment. The USDT issuer, revealed that it held less than $50 million in commercial paper.
According to Tether, the elimination of its commercial paper holdings makes room for its replacement by U.S. Treasury Bills (T-Bills).
Tether Aiding the Battle Against Cyber Exploitations
Of particular note is that Tether has been the vanguard of the ongoing fight against cyber exploitation that has rocked the industry in recent years. Recently, the issuer froze an Ethereum address with more than $715,000 worth of USDT holdinds, as per reports by block explorer site Etherscan.
The blacklisted address was linked to the exploitation of cross-chain bridge Multichain. The hacker reportedly compromised the integrity of the bridge, stealing $3 million in cryptocurrency.
Additionally, amidst the BNB Chain hack in early October, Tether blacklisted a suspicious wallet after approximately two million BNB tokens, equivalent to $590 million USD, were transferred to the wallet, raising alarms. Tether acted swiftly, freezing the address immediately after the funds had been transferred.
Meanwhile, Tether has continued to launch its tokens on numerous protocols, with the NEAR Network becoming the latest.
As of press time, the token is live on several other networks, including Algorand, Avalanche, Bitcoin Cashโs Simple Ledger Protocol (SLP), Ethereum, EOS, Kusama, Liquid Network, Omni, Polygon, Tezos, Tron, Solana, and Statemine.
On the Flipside
- Although stablecoins are often considered the least volatile cryptocurrencies, the New York Federal Reserve warns that even “safe” stablecoins can pose financial stability risks.
Why You Should Care
After the Terra debacle in May, Tether’s recent move represents a step towards even greater transparency and trust, not only for Tether, but for the entire stablecoin industry.