Tether Bumps Up Treasuries, Cuts Commercial Paper Holdings

Daniel Attoe
Daniel Attoe

Updated · May 20, 2022

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On Thursday, the team behind Tether said that it now holds around $286 million in non-US government bonds.

Switching Things Up

The issuer of Tether said in an attestation report that it has bumped up its ownership of US Treasuries while reducing the riskier commercial paper. Tether is the world’s largest stablecoin.

Stablecoins are cryptocurrencies that hold a steady value pegged to a sovereign currency, commodity, or another cryptocurrency. Tether is designed to hold a 1:1 peg to the US Dollar.

However, the digital asset has not been immune to the crisis that has rocked the cryptocurrency market. TerraUSD, another stablecoin, lost most of its value, dropping to as low as $0.07 at one point. 

The resulting panic shockwaves led to Tether briefly losing its peg and falling to around $0.95, - an all-time low. The stablecoin has since regained its peg to a large extent, now trading slightly below the US Dollar.

The Details

According to the report, Tether’s Treasury holdings increased by 13% to $39.2 billion in the first quarter. In contrast, the commercial papers that it owns reduced to $20.1 billion in that quarter, a 17% drop.

Commercial papers are unsecured, short-term debts that companies raise to meet obligations.

Since the beginning of April, that figure has fallen a further 20%.

Tether’s commercial papers have been a source of concern for regulators and industry stakeholders for a long time now. 

Significantly, it now holds $286 million in non-US government bonds. This is the first time that Tether has ventured in this direction.

The stablecoin’s reserves totaled $82.4 billion by the end of the first quarter. Its liabilities were slightly lower at $82.3 billion.

Sources.

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Daniel Attoe

Daniel Attoe

Daniel is an Economics grad who fell in love with tech. His love for books and reading pushed him into picking up the pen - and keyboard. Also a data analyst, he's taking that leap into data science and machine learning. When not writing or studying, chances are that you'll catch him watching football or face-deep in an epic fantasy novel.

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