scorecardresearch
Follow Us:
Sunday, August 14, 2022

Top stablecoin Tether slashes commercial paper holdings amid crypto gloom

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

By: Reuters |
July 2, 2022 3:30:25 pm
Here's how hedge funds are shorting Tether. (Representational Image)

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.

Subscriber Only Stories
Their own worst enemy; how Britain’s education policy cost it the Empire’...Premium
UPSC Essentials: Weekly news express with MCQs— RBI’s surveys to fo...Premium
MacBook Air 2022 review: The light little heavy weightPremium
The Bihar Handshake: Nitish, Tejashwi and a shared purpose — taking on BJ...Premium

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.

📣 Join our Telegram channel (The Indian Express) for the latest news and updates

For all the latest Technology News, download Indian Express App.

  • Newsguard
  • The Indian Express website has been rated GREEN for its credibility and trustworthiness by Newsguard, a global service that rates news sources for their journalistic standards.
  • Newsguard
First published on: 02-07-2022 at 03:30:25 pm

Featured Stories

Advertisement
Advertisement
Advertisement
Advertisement