Tether and how it has maintained ‘stability across multiple black swan events’

The market is expressing serious concerns about the so-called ‘stability’ of stablecoins, which are becoming a hot topic. With the market still struggling to find equilibrium after the Terra collapse, Tether report to the company’s finances. Tether, the largest stablecoin by market cap, also lost its peg after falling to $0.95. This has fueled fears of another sell-off that was suppressed after recovering most of its positions.

In general, stablecoins have been under tremendous pressure since the collapse of Terra in early May. Regulators have also criticized the use of stablecoins, demanding them from the Federal Reserve. Financial Stability Report.

“Increased use of stablecoins to meet margin requirements in leveraged cryptocurrency trading could lead to increased cryptocurrency trading,” he said.

finance, etc…

Tether recently submitted a “Consolidated Reserves Report” which included the finances of Tether Holdings Limited. This report also covers information relating to the company’s subsidiaries in the British Virgin Islands and Hong Kong.

The group’s total assets are $82.4 billion, of which 86% are cash and cash equivalents. Tether has $4 billion in corporate bonds, $5 billion in other investments, including crypto assets, and $3 billion in mortgages. Overall, Tether holds 52% of US Treasury bonds and 37% of commercial paper, with the rest being cash and short-term money markets.

This is a nearly 17% decline in commercial paper from $24 billion to $20 billion in the first quarter of 2022 alone. We will also show an additional 20% deduction in our Q2 2022 report.

Tether’s CTO and his 2 cents

Tether’s Chief Technology Officer Paolo Ardoino also commented on Tether’s performance. that said,

“Tether has been stable through multiple black swan events and highly volatile market conditions, and even on its darkest days, Tether has never fulfilled a verified customer’s reimbursement request. This up-to-date proof further emphasizes that Tether is fully backed and the composition of its holdings is strong, conservative and liquid.”

The report added a disclaimer stating that the asset valuation is based on “normal trading conditions”.

“The valuation of the group’s assets was based on normal trading conditions and did not reflect an unexpected and large-scale sale of assets, realizable values ​​that differ materially or delayed. As of the financial reporting date, management has not identified a provision for expected credit losses. .”

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