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LONDON – Tether, the world’s largest stablecoin, said on Thursday it had increased its holdings in U.S. government debt while cutting exposure to risky assets, a first look at its reserves since the recent sale of the crypto sector pushed the token.
Stablecoins, a variety of cryptocurrencies designed to maintain a stable value, has a sharp focus after the death of the TerraUSD token last week shook the crypto market.
Usually underpinned by reserves of assets such as dollars, gold and government debt, stablecoins are widely used in cryptocurrency trading – including the main means of transferring funds between crypto or regular cash.
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Yet Tether broke its 1: 1 peg with the dollar as the cryptocurrency declined, according to CoinMarketCap.
The token, operated by a British Virgin Islands company, is designed to hold the value of $ 1. Teether promises that it has enough reserves to allow all টি 70 billion Teether holders to exchange their tokens in dollars.
Tether said it increased its treasury holdings by more than 13% to $ 39.2 billion and reduced the risky commercial paper – short-term debt issued by companies – from about 17% to $ 19.9 billion in the first quarter.
Tether said its total reserves as of March 31 were $ 82.4 billion, of which $ 82.3 billion was liabilities. It has reduced its commercial paper holdings by an additional 20% since writing the Q1 report, chief technology officer Paolo Ardoino said.
Financial regulators around the world have warned that stablecoins could pose a risk to greater financial stability, with Britain seeking to regulate the sector as one of the major economies. (Reporting by Elizabeth Hawcroft in London and Hannah Langy in Washington; edited by Tom Wilson and David Gregorio)