Tether responds to WSJ’s insolvency claim, says its US Treasury assets are safe News ▸ US ▸ Tether ▸ Stablecoins
Tether responds to WSJ’s insolvency claim, says its US Treasury assets are safe
Tether responded to a WSJ article claiming that a 0.3% in the price of assets held in Tether's reserve could lead to insolvency.
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Updated: Aug. 30, 2022 at 3:16 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Tether has responded to concerns raised by a recent article by The Wall Street Journal claiming that the USDT issuer has inadequate reserves.
Tether’s financials released on Aug. 25 revealed it has $67.7 billion in assets as compared to $65.7 billion in liabilities, making a difference of $191 million.
The WSJ’s article had claimed that a mere 0.3% decline in asset value could result in “technical insolvency” for the stablecoin issuer. In response, Tether noted that the U.S. Treasury bills which back over 50% of the USDT stablecoin are the premier safe asset for several decades.
Tether said:
The assumption that 3 months’ worth of T-Bills is an unsafe asset, completely contradicts the longstanding fact that US Treasuries have been the premier safe asset worldwide for the past several decades.
Tether also refuted claims that hedge funds were short-selling in order to undermine its liquidity. Defending the health of the reserve, Tether said that $10 billion worth of USDT was redeemed in a single week, indicating its ability to withstand bank runs.
Tether reiterating its commitment to a transparent auditing process said it is actively working with accounting firm BDO to publish its attestation report on a monthly basis.
Tether reducing commercial paper
Tether mentioned in the statement it has also significantly reduced its commercial papers holdings in the past months.
BDO Italia confirmed that Tether’s commercial paper holdings had declined by 58%. As of June 30, Tether had $66.4 billion in assets, with only $8.5 billion in commercial paper.
By the end of August, Tether said it is working to reduce its commercial papers down to $200 million.
Author 
Christian Nwobodo
Christian is a crypto-curious nerd who loves to investigate how protocols work under the hood. Christian is interested in DeFi protocol research, token economics, and on-chain analytics.
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Launched in 2014, Tether is a blockchain-enabled platform designed to facilitate the use of fiat currencies in a digital manner.