The leading stablecoin issuer, Tether, is looking to further reduce its commercial debt holdings, according to Tether and Bitfinex CTO Paolo Ardonio.
“Over time, we will keep reducing the commercial paper, we aren’t finished yet with the reduction.”
Ardonio told CryptoSlate during an interview at the Paris Blockchain Week on April 14.
In its attestation for the last quarter of 2021, Tether claimed that it had reduced the commercial paper in its reserves by more than 20%. It has now doubled down on its efforts to lower its reserves allocation to commercial paper.
Commercial papers are short-term unsecured debts and, as of May 2021, accounted for 65.39% of the Tether reserve. But there were serious concerns about the security of these commercial papers, especially with the Evergrande crisis last year.
Tether reducing commercial paper holdings
Although Tether claimed it wasn’t holding commercial paper from Evergrande, many were still worried because the crypto firm failed to reveal the companies it was holding its commercial paper from and where those entities are.
Ardonio also told CryptoSlate that all the money from the commercial paper is going to the U.S Treasury. With a market cap of more than $82 billion, Tether’s USDT occupies a significant position in the stablecoin market and the crypto ecosystem.
The company has faced some level of scrutiny about its reserves in the past from regulators. It had to pay a fine of $18.5 million to New York regulators and $41 million to the US Commodity Futures Trading Commission for misleading statements about its reserves.
While the firm has strived to become more transparent, it is still yet to disclose details of companies whose commercial paper it owns. However, Ardonio has promised further transparency in the future, saying:
“Our journey towards increased transparency is not finished yet.”
USDT is now on Polkadot’s Kusama
Tether has expanded its reach to the Kusama blockchain by launching USDT on the network. Kusama is a multichain network composed of multiple parachains, individual blockchains running parallel to the Polkadot network.
USDT will now be available for transactions on Statemine, which is the first parachain. This launch further solidifies Tether’s position in the stablecoin scene and will provide a better and interoperable experience for users of Kusama.
This is a milestone moment, according to Ardonio, who added that:
“We’re excited to launch USDT on Kusama, offering its community access to the most liquid, stable, and trusted stablecoin in the digital token space”