Tether, the world’s largest stablecoins by market value, said on Friday it had reserves worth $66.4 billion (roughly Rs. 5,30,700 crore) at the end of June, down from $82.4 billion (roughly Rs. 6,58,600 crore) at the end of March. The reserves statement on Tether’s website came a day after it said it had switched to accountancy firm BDO Italia to certify its reserves and would aim to release monthly reports by the end of the year.
Stablecoins are a type of cryptocurrency designed to keep constant value, such as a 1:1 US dollar peg. They are widely used in cryptocurrency trading to move funds between different cryptocurrencies or into regular cash.
Financial regulators worldwide have warned that stablecoins could pose a risk to wider financial stability, with Britain among major economies looking to regulate the sector.
Tether says its coin maintains its value by holding dollar-denominated reserves to match or exceed the value of Tether coins in circulation.
Tether’s $66.4 billion (roughly Rs. 5,30,700 crore) reserve assets exceed its $66.2 billion (roughly Rs. 5,29,100 crore) liabilities, BDO Italia said in the statement.
In June, Tether’s chief technology officer Paolo Ardoino said in a tweet that Tether had processed $16 billion (roughly Rs. 1,27,876 crore) in redemptions. A broader crypto market meltdown had prompted investors to swap their Tether holdings back into dollars.
“The report itself looks positive for Tether, because it reinforces that there’s probably no bank run big enough to run them down to the parts of their treasury that might be questionable,” said Joseph Edwards, investment partner at Securitize Capital.
“The questionable part of the report is switching auditor yet again, especially given that it’s to a division with no existent presence in English-language markets,” Edwards added. “They’re within their rights to do so, but it’ll do little to silence critics.”
Tether did not provide further comment. Its website shows it has published reports vouching for its reserves from at least five other firms since 2017.
The company’s holdings of U.S. Treasury bills fell to $28.9 billion (roughly Rs. 2,31,000 crore) in the second quarter, the statement said, a $10.3 billion (roughly Rs. 82,300 crore) drop from the $39.2 billion (roughly Rs. 3,13,300 crore) it held in the first quarter.
Commercial paper and certificates of deposit were down to $8.4 billion (roughly Rs. 67,100 crore), showing an $11.7 billion (roughly Rs. 93,500 crore) drop.
In July, Tether said it had slashed its commercial paper holdings as part of a plan to reduce exposure to riskier assets.
Ardoino also said the company will have cut its commercial paper holdings to $200 million (roughly Rs. 1,600 crore) by the end of August, and to zero by the end of October.
© Thomson Reuters 2022