Tether has responded to concerns raised by a recent article by The Wall Street Journal claiming that the USDT issuer has inadequate reserves.
Tether’s financials released on Aug. 25 revealed it has $67.7 billion in assets as compared to $65.7 billion in liabilities, making a difference of $191 million.
The WSJ’s article had claimed that a mere 0.3% decline in asset value could result in “technical insolvency” for the stablecoin issuer. In response, Tether noted that the U.S. Treasury bills which back over 50% of the USDT stablecoin are the premier safe asset for several decades.
Tether said:
The assumption that 3 months’ worth of T-Bills is an unsafe asset, completely contradicts the longstanding fact that US Treasuries have been the premier safe asset worldwide for the past several decades.
Tether also refuted claims that hedge funds were short-selling in order to undermine its liquidity. Defending the health of the reserve, Tether said that $10 billion worth of USDT was redeemed in a single week, indicating its ability to withstand bank runs.
Tether reiterating its commitment to a transparent auditing process said it is actively working with accounting firm BDO to publish its attestation report on a monthly basis.
Tether reducing commercial paper
Tether mentioned in the statement it has also significantly reduced its commercial papers holdings in the past months.
BDO Italia confirmed that Tether’s commercial paper holdings had declined by 58%. As of June 30, Tether had $66.4 billion in assets, with only $8.5 billion in commercial paper.
By the end of August, Tether said it is working to reduce its commercial papers down to $200 million.
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