Less than $7 billion cash backs Tether (USDT) issuance

Tether Limited published a new report on USDT physical reserves, revealing that less than $7 billion in cash guarantees the issuance of the stablecoin on the market.

Transparency in the issuance and reserves of tether (USDT) it is a topic that is causing concern in the crypto community and arousing the curiosity of regulators worldwide. To date, several financial regulators have pronounced themselves in relation to the stablecoinsespecially on USDT, pointing to its huge growth and capitalization as a matter of concern that warrants early attention.

Tether (USDT) is the most popular and traded stablecoin in the crypto industry, and also one of the cryptocurrencies most controversial. The reason is that Tether Limited, the company responsible for the issuance of the USDT stablecoin, has been fairly quiet on the details of the physical reserves that support the issuance and circulation of its stablecoin. In fact, since the launch of USDT on the markets in 2014, Tether Limited has only published two transparency reports on the physical reserves of this coin. It is worth remembering that the transparency reports began to be published this year, after the New York Attorney General’s Office accused Tether Limited of submitting inflated reports and frequently demanded real information. The second report of transparency on USDT was published on July 30.

In this second report, Tether Limited shows that the total issuance of USDT, of $62.77 billion at the time of the report, is being backed approximately 10% by cash; with an approximate value of 6,282 million dollars.

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Detail of Tether reserves (USDT)

The transparency report, prepared by the Moore Cayman company, indicates that 85% of the USDT issuance is backed by “Cash and cash equivalents”, which includes fiat money, bank deposits, and commercial paper. However, as mentioned, actual cash reserves are only a fraction of this percentage, worth less than $7 billion.

The category of commercial paper and certificates of deposits occupies 49% of the total issuance of USDT and 57.7% within the classification of “cash and its equivalents”. On the other hand, Treasury bills, currently worth $15.279 billion, were up 26% from the first report published in March, when Tether Limited indicated that this category backed only 2.94% of its total issuance of USDT.

Treasury bills are debt instruments with a maturity equal to or less than one year.

Other categories that Tether Limited shows in its report are notes, secured loans, corporate bonds, and investments in precious metals and others. tokens. In total, all of these categories bring together approximately $10.4 billion in value, representing 16.5% of the total stablecoin issuance as of July 30.

Tether is “fully” backed

According to Paolo Ardoino, the tether stablecoin is fully backed by real reserves of value, as the report shows. This second transparency report of Tether Limited is published a few days after the Treasury Department, through the Office of the Comptroller of the Currency (OCC), said that it is investigating the company to learn the reality behind the enormous circulation of USDT, according to sources cited by Bloomberg.

The world’s regulators are beginning to worry about the rapid growth of stablecoins, which already exceed a market capitalization of $115 billionwith USDT, USDC and BUSD leading the way.

It is important to note that since the first report of Tether Limited, published in March, the issuance of tether in the market has increased by 48%, going from 42.35 billion dollars on March 31 to 62.8 billion dollars at the close. of this edition.

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