Top stablecoin Tether slashes commercial paper holdings amid crypto gloom


Smartphone with Tether logo is placed on displayed U.S. dollars in this illustration taken, May 12, 2022. REUTERS/Dado Ruvic/Illustration

(Reuters) - Tether, the world's largest stablecoin, said on Friday it had cut its commercial paper holdings by around 58% as part of an earlier commitment to reduce its exposure to riskier assets.

Stablecoins - a variety of cryptocurrencies designed to keep a steady value - are in sharp focus after the collapse of the TerraUSD token in May.

Usually underpinned by reserves of assets such as the U.S. dollar, gold and government debt, stablecoins are widely used in cryptocurrency trading and Tether is the predominant medium for moving funds between crypto or into regular cash.

Tether's reserves consist of U.S. Treasury bonds and commercial paper, which refers to short-term debt issued by companies.

The token has $8.4 billion of commercial paper and plans to reduce its holdings to $3.5 billion by the end of July, according to a statement. (https://bit.ly/3NzRTWS)

The company aims to reduce its commercial paper holdings to zero, in a bid to address concerns about the quality of assets underpinning its token amid the crypto market meltdown.

Tether had slid below its 1:1 peg to the dollar in May before recovering, a fall that had sent shockwaves across the sector.

(Reporting by Mehnaz Yasmin in Bengaluru; Editing by Aditya Soni)

Article type: free
User access status:
Subscribe now to our Premium Plan for an ad-free and unlimited reading experience!

   

Next In Tech News

In your office communications, watch your use of emojis
How to get your smartphone ready for a holiday
Snapchat introduces Family Centre tool to boost child safety
Try a free online tool to perfect your touch typing technique
Apps turning restaurant leftovers into cheap meals take off in Asia
‘Amazing Bomberman’:�The series’ rhythmic Apple Arcade debut
Exclusive-Inspired Entertainment in bid to buy slot machine maker PlayAGS - sources
U.S. heightens export controls on advanced chip, gas turbine engine technologies
Dutch detain suspected developer of crypto mixer Tornado Cash
Annuar: Ministry to take immediate action over iPay88 issue

Others Also Read