The biggest stablecoin issuer in the world, <a href="https://www.cryptoknowmics.com/news/tether-releases-offshore-chinese-yuan-cnht-on-tron-blockchain">Tether</a>, has <a href="https://tether.to/en/tether-addresses-fud-around-secured-loans-reveals-plans-to-reduce-these-to-zero-in-2023/" target="_blank" rel="nofollow noopener">promised</a> to ultimately stop lending money from its reserves because its mission is to rebuild trust in the cryptocurrency industry. Furthermore, Tether intends to stop supporting any secured loans in 2023.
<h2>Tether Addresses FUD Around Secured Loans</h2>
The stablecoin issuer acknowledged recent mainstream FUD fear, ambiguity, and doubt over its secured loans in a post on December 13, and additional FUD circulated on the scandal.

In addition to reiterating that its secured loans are excessively collateralized and backed by highly liquid assets, Tether said that the company will be removing these loans during 2023. The exchange stated that it would reduce the number of secured loans in its reserves to zero starting today and continuing until 2023.
<h2>Loans Comparable to Private Banks</h2>
The business noted that Tether's secured loans work is comparable to how private banks lend to clients when utilizing secured collateral. Tether asserted that its loans are completely guaranteed by more than 100%, in contrast to banks that run on fractional reserve banking.

The action is probably in response to a WSJ investigation from earlier this month that said these loans were hazardous. According to the statement, the firm might not have sufficient liquid assets to satisfy repayments in a crisis.
<h2>Tether Reserves in Highly Liquid Assets</h2>
The Wall Street Journal has already attacked Tether. The publication said Tether might become technically <a href="https://www.cryptoknowmics.com/news/bankruptcy-judge-demands-return-of-44m-in-crypto-to-celsius-users">bankrupt</a> in August if its assets dropped merely 0.3%. At the time, the <a href="https://www.cryptoknowmics.com/news/bermuda-digital-bank-jewel-issues-fully-backed-stablecoin">stablecoin</a> issuer denied the allegations, claiming that working with a top-5 accounting company has improved the reliability and openness of its certifications.

In accordance with such attestations, 82% of Tether's reserves are stored in "highly liquid" assets. In response to additional media FUD, Tether significantly reduced the amount of commercial paper in its reserves in October and replaced those holdings with U.S. Treasury Notes.

Tether Pledges to Erase Secured Loans As it Rushes to Prove Solvency

Tether has promised to ultimately stop lending money from its reserves and it intends to stop supporting any secured loans in 2023.

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Tether Pledges to Erase Secured Loans As it Rushes to Prove Solvency

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