Tether becomes more transparent, hires new firm to audit stablecoin.
Tether is looking to become more transparent by hiring a new accounting firm to regularly audit and attest to its stablecoin's proper back-up by the USD.
As of September 30, 2022, Tether (USDT) had nearly completely slashed its holdings of commercial paper units, with less than $50 million remaining. This represents a significant reduction in the company's debt load, and may be a sign that it is preparing for a more financially stable future.
Tether's CTO Paolo Ardoino announced that the company's United States Treasury bills increased to 58.1% of its total portfolio, up 25.1% from its Jun. 30 figure of 43.5%. This is a significant increase that will help to bolster the company's financial stability.
#tether portfolio update. Tether as of 30 September 2022 holds ~58.1% of its assets in US t-bills. Up from 43.5% on June 30 2022.— Paolo Ardoino (@paoloardoino) October 3, 2022
CP exposure is < 50M now.@Tether_to
As a commercial paper issuer, I believe that commercial papers offer a number of advantages over treasury bills. First, commercial papers are typically shorter-term debt instruments, which means that they can be used to finance various business operations on a more flexible timeline. Second, commercial papers are not subject to the same "zero default risk" guarantee as treasury bills, which means that investors may be more willing to take on risk when investing in commercial paper. Finally, commercial papers typically offer higher interest rates than treasury bills, which makes them more attractive to investors seeking to maximize returns.
As the stablecoin ecosystem continues to grow, Tether is working to increase the stability of its USDT stablecoin by decreasing commercial paper backing and rolling into short-maturity U.S. Treasury bills. This will help to create a more stable and secure ecosystem for users and businesses alike.
As a stablecoin issuer, we are committed to increasing transparency into our dollar reserves and backing. We believe that this will help to instill confidence in our currency and maintain its stability. We are constantly working to improve our processes and will continue to strive for transparency in all aspects of our business.
The move by Tether to appoint BDO Italia as its new auditor is a positive step towards increasing transparency and providing more regular reports on the status of its stablecoin reserves. This will help to build confidence in the cryptocurrency and ensure that it remains a viable option for investors and users.
It is essential that Tether provide documents that prove the 1-to-1 backing of the USDT stablecoin, in order to maintain confidence in the cryptocurrency markets. Without this level of transparency, there is a risk that USDT could collapse, taking down other cryptocurrencies with it.
We can expect Tether's transparency report to be updated more quickly in the future, thanks to the company's new auditor. This is a positive development for those who rely on Tether for information about the company's financial status.
Tether's plan to reduce its commercial paper holdings by 80% by the end of 2022 is on track, with the firm reducing its reserves from 20 billion units in Q1 2022 to 8.4 billion units in Q2 2022. This aggressive reduction in debt will help Tether improve its financial position and reduce its reliance on borrowing to fund operations.
The USDT stablecoin is currently the largest digital asset by market capitalization, according to CoinGecko data. USDT has a market cap of $67.95 billion, the third highest of all digital assets. USDT is a popular choice for investors and traders looking for a stablecoin that is backed by US dollars.