Stablecoin tether has beefed up its Treasury holdings and added over $250 million in non-US government debt to its reserves

The issuer of Stablecoin tether now holds over a quarter of a billion dollars in short-term non-US government debt as part of its reserves, and it has cut its holdings of commercial paper in favor of Treasuries, according to its latest attestation report.

A source of controversy in the market has been the reserves of tether. A series of audits showed that the tether token was not fully backed by US dollars, with short-term commercial paper making up the bulk of its reserves.

The issuer reached a settlement with the New York state attorney general, who alleged tether wasn't fully backed by US dollars at all times.

In the three months since its last attestation in February, tether cut around $4 billion in holdings of commercial paper. Commercial paper is a form of short-term corporate debt that has been hit hard by an exodus of investors from the riskier corners of the fixed-income market.

Roughly that amount has been added in US Treasury bills. They made up almost half of the total reserves.

The independent account that completed the attestation said that the evidence they obtained was sufficient and appropriate to provide a reasonable basis for their assurance opinion.

Previously, tether held nothing in non-US government bills.

After the collapse of terraUSD, the issuer and its cryptocurrencies have come under closer scrutiny. The crash of UST cast doubt on the robustness of stable coins, and on their role as a less volatile store of value.

tether trades at a 3:1 ratio to the US dollar, but last traded at $1 on May 10, and has remained below that threshold ever since. tether has not been exempt.

The number of tether coins in circulation has fallen by almost $10 billion so far in May, a sign analysts say could be worrying.

The market cap of USDT plummeted during the month of May. If redemptions continue at this pace, we could see a nuclear winter incryptocurrencies.

Paolo Ardoino was far more positive.

Commercial papers were reduced in the first quarter of 2022. The current reduction of CP over Q1 is over 20%. All moved to US treasuries. The portfolio has gone down in maturity. He thanked everyone on Thursday.

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