Cash and cash equivalents accounted for 76% of Tether Holdings Limited’s reserves. The data are contained in the issuer’s USDT quarterly report as of March 31, 2021.
📢Tether releases quarterly information about the composition of its reserves backing issued tether tokens ⬇️https://t.co/LP72rAuDtz
— Tether (@Tether_to) May 13, 2021
The remaining portion of the reserves (24%) consisted of secured loans (12.55%), holdings in funds, bonds and precious metals (9.96%), and investments in digital assets (1.64%).
According to the document, secured loans were issued to entities not affiliated with Tether Holdings Limited.
Within the structure of cash and cash equivalents, the share of promissory notes stood at 65.4%, their equivalents issued by the U.S. Treasury at 2.94%, and reverse repurchase agreements at 3.6%. Fiduciary deposits accounted for 24.2%, and cash assets for 3.87%.
In an interview with The Block, Tether’s chief legal officer Stuart Hoegner urged investors not to treat lines other than cash as a liquidity issue. He said it would be a mistake to focus solely on this metric.
A company representative declined to disclose the names of the issuers of the notes, citing “standard commercial practice”.
The lawyer gave no details on other reserve line items. He noted only that investments in digital assets are 100% Bitcoin.
“Bitcoin is a diversification of risk. As a hedge, it is used by several large public and private companies.”, said Hoegner.
In February, the issuer of the stablecoin and the related cryptocurrency exchange Bitfinex settled the dispute with the New York Attorney General’s Office over the loss of $850 million. At the time, Attorney General Letitia James said that Tether’s claims that its digital asset was fully backed by U.S. dollars were false.
The release of the current report formed part of the settlement with the New York Attorney General. The company undertook to continue this practice over the next two years.
In May 2019, the company’s chief legal officer Stuart Hoegner confirmed that only 74% of USDT backing consisted of fiat money.
In late March 2021, independent auditor Moore Global presented a conclusion on the sufficiency of reserves at Tether Holdings Limited to fully back the stablecoin.
In April, the capitalization of USDT exceeded $50 billion, and the cryptocurrency exchange Coinbase Pro announced its listing.
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