Tether disclosed the details of reserves for the first time: Bitcoin and other investments accounted for 1.64%

This article comes fromThe Block, original author: Yogita Khatri

Odaily Translator | Nian Yin Si Tang

Summary:

This article comes from

, original author: Yogita Khatri

Odaily Translator | Nian Yin Si Tang

secondary title

Summary:

- As of March 31, 2021, reserves held by Tether comprised nearly 76% of cash and cash equivalents and other short-term deposits and commercial paper.

- The rest are secured loans, bonds and other investments, including Bitcoin.

Stablecoin issuer Tether has disclosed a breakdown of its reserves for the first time since its launch in 2014.

In fact, commercial paper makes up the majority of its cash and cash equivalents, accounting for a 65% share. Fiduciary deposits accounted for 24%, reverse repo notes accounted for 3.60%, treasury bills accounted for about 3%, and actual cash accounted for only 3.87%.

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Image source: Tether

Asked why actual cash is only a small portion of total reserves, Tether’s general counsel Stuart Hoegner told The Block that “focusing solely on cash is misleading” in the cash and cash equivalents category. "Readers should not confuse non-'actual cash' categories with illiquidity," he added.

As for the details of the commercial paper, Hoegner declined to name the counterparty "in accordance with standard commercial practice".

Another 25% in reserves

The rest of the reserves are divided into three categories: secured loans (of which no affiliated entity loans) accounted for 12.55% of the total reserves; corporate bonds, funds and precious metals accounted for almost 10%, and other investments including digital tokens accounted for 1.64%.

These secured loans are issued by Tether, Hoegner told The Block. As for bonds, funds, and precious metals categories, Hoegner declined to give further details, and as for digital tokens, Hoegner said he was only referring to bitcoin.“We’ve seen bitcoin become an important part of the balance sheets of several large companies in the public and private markets. This helps to spread risk,” Hoegner told The Block. “Tether’s use of bitcoin and other forms of investment is exactly consistent with this approach.”Tether had a market capitalization of $42.35 billion as of March 31, according to data compiled by The Block.

secondary titleTether's road to "transparency"

When Tether launched, it initially claimed that every Tether (USDT) was backed 1:1 by USD. In March 2019, the company updated its website to say that "all Tether tokens are 100% backed by Tether's reserves." Subsequently, the company created a

transparency page

, which outlines corporate assets and liabilities denominated in three currencies and gold. But as of today, Tether did not give a detailed breakdown of these reserves.Settlement and payment of $18.5 million between the company and the Office of the Attorney General of New YorkAfter nearly three months, the details of Tether's reserves have finally been released.