By Mark Ackman
As the world’s largest stablecoin, Tether has numerous fans because of how it’s pegged to the dollar.
Recently, it slashed back on its commercial holdings, bringing them down to zero and replacing them with treasury bills.
Making the announcement via a blog post, the stablecoin cryptocurrency said that the latest move is part of their strategy to enhance transparency.
In doing so, they’re backing the stablecoin with the market’s most secure reserves, which can give investors a sense of protection.
Based on CoinMarketCap data, tether has around 68.4 billion tokens currently in circulation, which is a sharp increase from the 2 billion just three years ago. Tether currently holds a market cap of $68.4 billion.
Tether Releases Attestations Every 3 Months
In the official statement, Tether explained how it aims to lead the industry in terms of transparency by providing at three-month intervals.
The commercial paper acts as an unsecured, short-term debt that’s issued by companies, but is not as reliable as Treasury bills.
Also known as t-bills, treasury bills are short-term debt obligation by the US government that is backed by the treasury department. Usually, they have a maturity of a year or less.
The CTO for Tether, Paolo Ardoino, stated in October that 58.1 percent of Tether assets are in T-bills. That’s a sharp increase from 43.5 percent in June.
Although there’s no confirmation on where that percentage stands as of now, Ardoino’s post from Thursday explains that the company paid out 10 percent of its reserves, or $7 billion, in 2 days.
Confident in Tether’s stability and transparency, he told the audience to check if other stablecoins can do so in the same time frame.
Tether’s Latest Move Set Can Increase Trust in Stablecoins
Tether’s statement from Thursday also notes that taking the commercial paper holdings balance to zero is a step toward better transparency for all stablecoins, not just Tether.
This comes after the stablecoin sector faced serious trust issues over the previous year.
In just the last year, Tether was fined millions of dollars after facing off a legal battle against the attorney general’s office in New York. The main concern surrounding the lawsuit was the viability of the stablecoin’s reserves.
To make matters worse, terraUSD collapsed in May, costing investors billions. As one of the most well-known stablecoins in the cryptocurrency sector, this came as a shock to proponents.
Tether Attempts to Rebound after Regulatory Backlash
Even before terraUSD imploded, Tether experienced backlash from regulatory authorities over the reliability of its reserves.
Although Tether previously claimed that each of its tokens was backed by a dollar, this turned out to be false. After reaching a settlement with the New York AG, it was revealed that it relied on commercial paper as well.
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