Tether, a stablecoin issuer, claimed in the first quarter of this year that it lowered its commercial paper holdings to strengthen the integrity of its reserves.
Tether announced today that its commercial paper has been lowered by 17 percent to $19.9 billion from $24.2 billion the previous quarter. It also increased the value of US Treasury bills from $34.5 billion to $39.2 billion.
The company also stated that it aimed to reduce its commercial paper by another 20% in the second quarter, which will be reflected in its report.
Bloomberg reported last October that large Chinese companies had issued much of Tether’s commercial paper, prompting some analysts to question the reserves’ quality. Tether has chosen not to reveal the names of those companies.
Tether had around $82 billion in reserves on March 31, 2017, according to a quarterly attestation report, with $4 billion in cash reserves and bank deposits. According to CoinGecko, its current market cap is at $74 billion.
Investor concerns over the recent TerraUST collapse caused the company considerable problems. USDT’s market cap has plummeted by nearly $9 billion in the last week due to a surge in dollar redemptions. Nonetheless, the corporation stated in a post on May 12 that all redemptions will be honored as proof of its solvency.
Terra (LUNA) was trading nicely a few weeks ago; in fact, the charts and price movement were both superb. Almost every cryptocurrency trader was caught off guard when that crash occurred a few days ago. As a result of the UST’s recent big failures, the stablecoin has decoupled, as well as having a negative impact on the price of Terra LUNA in an already pessimistic market.
Despite its current difficulties, LUNA remains a good and promising concept. On the one hand, it is the cryptocurrency industry’s only stablecoin-focused initiative. This is critical because investors are looking for a digital medium of exchange that is less volatile and less volatile than pure-play crypto assets. While the present downturn will not be forgotten anytime soon, we feel Luna’s price forecast is still correct.