USDT Stablecoin issuer seeks to reduce its commercial debt holdings
Tether company is planning to reduce all holding commercial debts, which is a big question against the operations of Tether.
Stablecoin use cases surged rapidly in the past few years because of the entry of the Decentralized Finance ( Defi) concept in the crypto industry. With the increasing adoption and use case of Stabelcoins, tension among regulatory bodies increased rapidly and they are working to bring possible strict action to ensure the safety of stablecoin users.
On 13 April, Paolo Ardoino, the chief technology officer of both Tether and Bitfinex, appeared in an interview with CNBC. Paolo said that Tether is moving toward the steps to make its USDT Stablecoin operations more transparent to users. Also, he noted that the Company sent a quarterly report to the New York office of the Attorney General.
Tether’s CTO also confirmed that the company reduced its 21% commercial paper, which was a big pressure on the debt holdings. Also noted that the company will work to reduce more commercial papers and also replace its reserves in bonds of the US Treasury.
In the past, officially Tether didn’t reveal its commercial papers related about its debts. But based on the rating on the degree of risk, Paolo said that its rating is standing at A2, which is the minimum risk rate.
CFTC’ Fine on Tether
In October 2021, US Commodity Futures Trading Commission (CFTC) found that Tether was claiming that its USDT were fully reserved by US dollars but allegedly it was not.
In the form of fine, the CFTC agency forced CFTC to pay a total of $41 million.
However Fine on Tether was not only part of its unbacked USDT coin but it was also associated with the holding of Tether’ huge commercial papers of Chinese companies but denied having such debt holdings from Chinese companies.
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