Tethers quarterly assurance report reveals $24.2 billion in commercial paper holdings

Tether, the company behind the world's largest stablecoin, USDT, with a market capitalization of $79.4 billion, released its quarterly assurance report, revealing that its commercial paper and certificate of deposit holdings are now at $24.2 billion, down 21% from the previous quarter's $30.5 billion.

MHA Cayman, a firm of independent auditors, accountants, and business advisors based in the Cayman Islands that specializes in the audit of investment funds and digital assets, completed the assurance report. The chart depicts the firm's reserves as of December 31, 2021.

As part of the stablecoin issuer's $18.5 million court settlement with the Office of the New York Attorney General in February 2021, the stablecoin issuer is required to declare its reserves every quarter. In 2017 and 2018, the corporation was accused of misrepresenting the quantity of currency backing USDT.

Background story

Tether's consolidated total assets, which total $78.7 billion, outnumber its consolidated total liabilities, which total $78.5 billion, but the difference is only $137.3 million, according to the report.

In comparison to the previous report, cash and bank deposits have decreased by 42 percent to $4.187 billion. Its money market fund allocation jumped by 200 percent to $3 billion, while its treasury bills allocation increased by 77.6% to $34.52 billion.

The drop in commercial paper holdings is noteworthy because commercial papers accounted up 65.39 percent of Tether's reserves as of May 2021, prompting concern from the cryptocurrency community, with many in the area questioning the paper's origins and integrity as an investment.

Last year, there were also concerns that the company would be exposed to the Evergrande issue through commercial paper holdings, although Tether stated that this was not the case. Large firms frequently issue commercial paper to raise capital, and it is used to support payroll and short-term liabilities. Because it is frequently not backed by any sort of collateral, it is referred to as unsecured debt.

The maturity of commercial papers is also broken out in the study. It reveals that $13.4 billion of commercial paper has a maturity window of 0-90 days, $9.95 billion has a maturation window of 91-180 days, and $823.8 million has a maturation window of 181 to 365 days.