Tether replaces commercial paper with US Treasury Bills

Tether’s commercial paper has shrunk to zero, the USDT issuer has announced.

Instead of holding commercial paper, Tether has replaced the investments with US Treasury Bills (T-Bills).

The news comes just a few months after the USDT issuer said it would completely remove commercial paper from its reserves, and is a route the company has pursued as it looks to increase transparency around its stablecoin reserves.

Tether has eliminated over $30 billion dollars of commercial paper without any losses, a proof of how Tethers’ reserves are conservatively and professionally managed. Tether has also increased its direct exposure to US Treasuries by more than $10 billion in the last quarter.(2/3)

— Tether (@Tether_to) October 13, 2022

Tether CTO Paolo Ardoino affirmed in May that USDT was fully backed, and in July 2022, Tether announced its CP holdings were on track to fall below $3.5 billion.

Ardoino then said in August that the stablecoin issuer’s commercial paper holdings would drop below $200 million at the end of the month and to zero by the end of October 2022. In September, the company revealed that its CP holdings had dropped below $50 million.

In all, Tether has managed to eliminate $30 billion worth of commercial paper from its reserves.

USDT reserves in more US Treasury bills

On the company’s website, Tether shows it holds 54.57% in US Treasury Bills and 15.89% in Commercial Paper and Certificates of Deposit.

The total reserves breakdown shows Cash & Cash Equivalents and Other Short-Term Deposits & Commercial Paper make up 79.62% of the USDT reserves, with 8.36% in other investments that include digital tokens, 6.77% in secured loans and 5.25% in corporate bonds, funds and precious metals.

Going by these percentages, replacing commercial paper investments with T-Bills increases the latter’s overall holdings under cash and cash equivalents to 70.46%.  

US T-Bills means Tether now backs its USDT with the “most secure, liquid reserves in the market,” the company noted.