The issuer of the tether said in a report that it is backed by government bonds.
Stable coins are pegged to the value of traditional assets. The company behind the token of the same name wants to track the U.S. dollar.
In its latest report, Tether said its holdings of U.S. Treasurys rose in the first quarter.
The amount of short-term loans to companies owned by the company fell by 20% since April 1, the company said. The potential exposure of money markets has been a concern for regulators and economists.
It is the first time that the company has revealed it is buying government debt from countries outside the U.S.
The amount of non-U.S. bonds is a small part of the $82 billion in assets that tether claims to own. The governments issuing the funds aren't clear.
Bonds issued by the U.S. government are seen as safe and liquid. Debt from other less developed economies is riskier than debt from developed economies.
It was not immediately available for comment on which non-U.S. bonds it has bought.
Paolo Ardoino, Tether's chief technology officer, said that the latest attestation shows that Tether is fully backed and that its reserves are strong, conservative and liquid.
A 1-to-1 peg to the dollar is what tether is meant to maintain. tether was briefly below $1 on several exchanges last week due to panic over the collapse of terraUSD. TerraUSD is a stable coin that attempted to maintain a value of $1 using code rather than cash.
It's a crucial part of the market. It is the world's biggest stable coin and facilitates billions of dollars worth of trades each day. In times of heightened volatility in cryptocurrencies, investors often park their cash in tether.
This past week was an example of the strength and resilience of tether.
The amount of cash flowing out of tether has raised questions about the reserves behind it. The previous claim was that tether was backed by U.S. dollars. In the past week alone, investors have withdrawn more than $7 billion from Tether.
After a settlement with the New York attorney general, the company started releasing quarterly financials.
The documents are signed by a small accountancy firm.
Some economists and investors want a full audit of Tether's attestations. An audit is on the way.
The risk of a bank run in which investors flee stablecoins was warned by the Treasury Secretary last week. The market for stable coins is now $160 billion.
The professor of finance at the University of Texas believes there is a systemic risk in the stablecoin market. People probably underestimate that risk.
Some of the early backers of the digital coin are confident that it is backed.
Brock Pierce, a co-founder of Tether, told CNBC that breaking its peg is an overstatement. He said that Deviations in tether's price have happened dozens of times.
A former child actor, Pierce founded numerous other ventures in the space.
He said that all start-ups have challenges.
The firm's management has everything to lose if they screw it up, according to one of the co-founders.
Collins said that not many financial institutions could redeem over $7 billion in a day.
Terra halts theBlockchain, Tether loses $1 peg.
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