Tether (USDT) has maintained that its reserves are solid and fully backed, despite widespread concerns about stablecoin stability following the TerraUSD crash. Concerns regarding Tether’s reserves grew after it was revealed that investors withdrew more than $7 billion after USDT briefly fell below the dollar peg.
Tether is the firm behind USD Tether (USDT), the world’s largest stablecoin. It uses a basket of assets to keep the value of its centralized stablecoin stable, including corporate debt, US Treasury bills, and certain cash reserves.
“Today, Tether Holdings Limited made available its latest quarterly assurance opinion demonstrating the strength of its reserves, revealing significant reductions in commercial paper investments and an overall increase in U.S. treasury bills.” It also demonstrates that the group’s consolidated assets exceed its consolidated liabilities,”
The collapse of Terra and its UST stablecoin, which occurred just over a week ago, sent the stablecoin community into a frenzy. Some of them, such as USDC and BUSD, were trading at a premium to the market and were feeling fairly good. Others, such as USDN, DEI, and USDT, have faced significant pressure due to a lack of investor confidence.
Tether indicated on May 19 in its 2022 Q1 quarterly assurance opinion that the company’s current reserves have more consolidated assets than liabilities. Tether’s consolidated reserves report shows a 17 percent drop in commercial paper from $24.2 billion to $19.9 billion quarter over quarter. The attestation, conducted by independent accountants MHA Cayman, depicts the group’s assets as of March 31, 2022, as follows: The group’s consolidated total assets are at least $82,424,821,101. The group’s consolidated assets exceed its consolidated liabilities. The group’s reserves against issued digital tokens exceed the amount required to redeem them. Consolidated assets show a significant decrease in average maturity, focusing on shorter-term assets.
Investor concerns over the recent TerraUST collapse caused the company considerable problems. USDT’s market cap has plummeted by nearly $9 billion in the last week due to a surge in USDT redemptions. Nonetheless, the firm stated in a post on May 12 that all redemptions would be honored as proof of its solvency.
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