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On October 13, 2022, Tether Holdings Limited announced that the stablecoin issuer has reduced the companys commercial paper holdings down to zero. The company has said it would reach this goal for a while now, and Tether says that shrinking commercial paper holdings down to zero demonstrates Tethers commitment to backing its tokens with the most secure reserves in the market.

The company behind the largest stablecoin by market capitalization, Tether, has revealed that USDTs reserves are exposed to U.S. Treasury Bills (T-Bills), in contrast to commercial paper holdings. The announcement follows the statement Tethers chief technology officer Paolo Ardoino made on October 3.

At the time, Ardoino explained that U.S. Treasury bills represented more than 58% of the companys reserves, and he further said [Commercial paper] exposure is [less than] 50M now. The company that manages USDT, a stablecoin with a market valuation of around $68.53 billion, believes the decision to erase commercial paper holdings is positive for the crypto industry as a whole.

Reducing commercial papers to zero demonstrates Tethers commitment to backing its tokens with the most secure reserves in the market, the company stated on Thursday. This is a step towards even greater transparency and trust, not only for Tether but for the entire stablecoin industry.

Tethers move follows the issues associated with the Terra blockchain and the UST de-pegging event last May. Furthermore, a handful of stablecoins have de-pegged from the $1 parity following USTs collapse. The news also follows the stablecoin USDCs market cap deflating during the last few months down to todays valuation of around $45.82 billion.

USDTs market cap dropped as well, following the Terra collapse, as Bitcoin.com News reported in mid-June that the number of USDT in circulation dropped by over 12 billion coins in two months. Despite the drops of USDT and USDC in circulation, the stablecoins are still the top two stablecoin assets by market cap, and the third (USDT) and fourth (USDC) largest crypto assets by valuation.

What do you think about Tether fulfilling the companys promise to reduce commercial paper holdings down to zero? Let us know what you think about this subject in the comments section below.

Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.

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Stablecoin Issuer Tether Fulfills Promise by Reducing Commercial Paper Holdings Down to Zero Bitcoin News - Bitcoin News