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On October 13, 2022, Tether Holdings Limited announced that the stablecoin issuer has reduced the company’s certificate holdings down to zero. The company has said it would reach this goal for some time now, and Tether says shrinking its certificate holdings to zero “demonstrates Tether’s commitment to backing its tokens with the safest reserves in the market.”
The company behind the largest stablecoin by market capitalization, Tether, has revealed that USDT’s reserves are exposed to US Treasury bonds (T-Bills), as opposed to certificate holdings. The announcement follows the statement made by Tether’s chief technology officer Paolo Ardoino on October 3.
At the time, Ardoino explained that US T-bills represented more than 58% of the company’s reserves, and he further stated ” [Commercial paper] exposure is [less than] 50 million now.” The company that manages USDT, a stablecoin with a market cap of around $68.53 billion, believes the decision to delete certificate holdings is positive for the crypto industry as a whole.
“Reducing certificates to zero demonstrates Tether’s commitment to backing its tokens with the safest reserves in the market,” the company said Thursday. “This is a step towards even greater transparency and trust, not only for Tether, but for the entire stablecoin industry.”
Tether’s move follows the issues surrounding the Terra blockchain and the UST de-pegging event last May. Furthermore, a handful of stablecoins have de-pegged from the $1 parity following UST’s collapse. The news also follows stablecoin USDC’s market capitalization which has deflated over the past few months to its current value of around $45.82 billion.
USDT’s market cap also fell, following the Terra collapse, when Bitcoin.com News reported in mid-June that the number of USDT in circulation fell by over 12 billion coins in two months. Despite declines in USDT and USDC in circulation, stablecoins remain the top two stablecoin assets by market capitalization, and the third (USDT) and fourth (USDC) largest cryptoassets by valuation.
What do you think about Tether fulfilling the company’s promise to reduce its certificate holdings down to zero? Let us know what you think about this topic in the comments section below.
Image credit: Shutterstock, Pixabay, Wiki Commons, Tether,
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