Tether, the issuer of the world’s largest stablecoin USDT, has denied holding any commercial paper or securities issued by Chinese real estate firm Evergrande.
Stablecoin issuer Tether said recently that it doesn’t hold any commercial paper or securities issued by real estate developer China Evergrande group.
Tether issues the world’s largest stablecoin USDT, which is pegged to the value of the US Dollar and has a market capitalization of $68 billion. The stablecoin is backed by a variety of assets, including commercial paper, certificates of deposit, loans, treasury bills, cash, bonds, and cryptocurrencies.
According to Tether’s most recent assurance report, the company holds $30.8 billion in commercial papers and certificates of deposit. The size of Tether’s investments puts it in the same league as fund managers Vanguard and BlackRock.
As of now, the company hasn’t shared the location of its commercial paper investments. However, Tether’s general counsel Stuart Hoegner has asserted that the purchases were made via “recognized issuance programs”, with limits on regional exposures.
China Evergrande Group is currently in the midst of a crisis that could have far-reaching implications for the Chinese financial system and the broader economy. According to a Bloomberg report, the firm owes $300 billion in liabilities and is scrambling to raise funds for upcoming payments.
Additionally, the developer’s main unit has been downgraded due to which it suspended the trading of its corporate bonds. Evergrande has to make $669 million worth of coupon payments by the end of this year. In 2022, its outstanding bonds worth billions will become due.
While Evergrande has managed to repay its public bonds this year, raising funds for 2022 could be challenging, give its cratering stock price.