Tether Holding Limited has released information about the underlying reserves of Tether, the stablecoin that is the undisputed queen of the market for cryptocurrencies pegged to the US dollar.
Following the controversy, lawsuits, and accusations of manipulating the price of bitcoin, the company is now opting for total transparency.
In the document made public, it is possible to see two pie charts showing Tether’s underlying reserves as of 31 March 2021.
They break down as follows:
- 75.85% cash, cash equivalent, short-term deposits and commercial paper;
- 12.55% secured loans;
- 9.96% corporate bonds, funds and precious metals;
- 1.64% other investments (including digital tokens).
The largest portion, 75.85% Cash & Equivalent, is in turn divided as follows:
- 65.39% commercial paper;
- 24.20% fiduciary deposits;
- 3.87% cash;
- 3.6% reverse repo notes;
- 2.94% treasury bills.
Stuart Hoegner, General Counsel of Tether explained:
“Today, Tether Holdings Limited made available information about the composition of its reserves backing issued tether tokens. Tether proposed ongoing publication of the reserve breakdown as part of our settlement agreement with the New York Attorney General’s Office, and we committed to make that information available to both the Attorney General’s office and the public. Today’s publication reflects our ongoing dedication to transparency and setting the standard in our industry”.
Tether reserves and market capitalization
The disclosure of reserves definitively demonstrates that Tether is “fully backed” and it is part of the agreements made with the New York Attorney General’s Office to settle the lawsuit that threatened the very existence of USDT.
In any case, the market has always had confidence in Tether, the queen of stablecoins. Today it is fifth in market capitalization (according to CoinMarketCap), with a market cap that recently surpassed 50 billion and now stands at 57 billion USD.
To understand its dominance in the market, it is enough to know that the second stablecoin in the ranking, USDC (14th in CoinMarketCap’s ranking) has a capitalization of “only” $14 billion.
Probably the greater transparency that Tether is giving to its stablecoin will help to increase its adoption even more.