<span style="font-weight: 400">Ethereum and Blockchain-based cryptocurrency Tether is known to have minimized its commercial paper holdings by $6.2 billion in the last quarter of 2021. </span>

https://twitter.com/BossBlunts1/status/1514269127535386627

<span style="font-weight: 400">Years together, the cryptocurrency firm Tether was persistent to share that each of its USDT coins was supported by 1 US Dollar. As Tether began issuing “transparency reports” depicting its reserves constituting cash, crypto tokens, bonds, cash equivalents, and commercial paper. </span>

<span style="font-weight: 400">Regulators were concerned that stablecoin Tether wasn’t as stable, mostly due to the firm not announcing in detail the debts the company holds. However, in an interview, the CTO of Tether Paolo Ardoino stated that the company is scaling back its reliance on commercial paper and continue cutting down on its reserves as well.</span>
<h2><span style="font-weight: 400">How Is It Problematic?</span></h2>
<span style="font-weight: 400">Federal Reserve Chairman Jerome Powell explained why a stablecoin like Tether holding a large number of reserves in debt can be an issue. </span>

<span style="font-weight: 400">He explains commercial paper as short-term obligations via companies that can be either investment grade or liquid. Either of the scenarios is good for stablecoin, however, it hasn't been the same since the financial crisis of the 21st century. </span>
<h2><span style="font-weight: 400">Tether’s Most Recent Breakdown</span></h2>
<span style="font-weight: 400">Reportedly, the largest stablecoin issuer, <a href="https://www.cryptoknowmics.com/news/tether-reduces-commercial-paper-holdings-to-24b/">Tether</a> cut its assets held in commercial paper from $30.5 billion in September to $24.2 billion in December. Additionally, Tether also reduced its cash assets, from $7.2 billion to $4.2 billion. </span>

<span style="font-weight: 400">The cryptocurrency firm has allocated its reserves to Treasury bills, now by almost doubling assets in short-term government securities from $19.4 billion to $34.5 billion.</span>

Tether Cuts Its Commercial Paper Holdings

Ethereum and Blockchain-based cryptocurrency Tether is known to have minimized its commercial paper holdings by $6.2 billion.

Priyanka is an active crypto enthusiast. Having graduated with a BA in Journalism and Mass Communication, she is a passionate content writer with a strong understanding of financial content. She has been writing on crypto and blockchain-related topics for the last three years and is an active trader.

Tether Cuts Its Commercial Paper Holdings

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