Tether Calms USDT Depeg Fears With New Reserves Report


Key Takeaways

  • Tether has published its Consolidated Reserves Report along with attestation from the independent auditing firm MHA Cayman.
  • The report shows Tether’s consolidated assets exceeding its consolidated liabilities, suggesting tha USDT was fully backed as of Mar. 31.
  • It also shows Tether reducing its exposure to commercial paper by 17% in favor of less risky U.S. treasury bills.

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Tether has published its latest reserves attestation report for the first quarter of 2022. Conducted by independent accountants MHA Cayman, the attestation shows Tether’s consolidated assets exceeding its consolidated liabilities, suggesting that Tether’s USDT tokens were fully backed as of Mar. 31.

Tether Publishes Q1 Reserves Report

Tether has published the latest independent attestation of the reserves backing its USDT stablecoin.

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The firm published its Consolidated Reserves Report Thursday along with an attestation from the independent auditing firm MHA Cayman. The attestation independently re-affirmed the accuracy of Tether’s quarterly reserves report, which showed the company’s consolidated reserves exceeded its consolidated liabilities. This suggests that, as of Mar. 31, Tether’s USDT tokens were fully backed by cash, cash equivalents, other short-term deposits, and commercial paper.

The report put Tether’s consolidated assets at $82,424,821,101 and its consolidated liabilities at $82,262,430,079, $82,188,190,813 of which related to USDT issued. The attestation also showed that Tether decreased its riskier commercial paper holdings by 17% over the prior quarter for generally considered less risky U.S. treasury bills. It also said that it has further reduced its commercial paper holdings by 20% since Apr. 1. Commenting on the report, Tether’s Chief Technology Officer Paolo Ardoino said: 

“This latest attestation further highlights that Tether is fully backed and that the composition of its reserves is strong, conservative, and liquid. As promised, it demonstrates a commitment by the company to reduce its commercial paper investments and in doing so, led to a rise in its holdings in U.S. Treasury Bills.”

Tether’s USDT was among the few stablecoins that suffered from increased volatility amid last week’s wider market turmoil triggered by Terra’s $40 billion collapse. It briefly lost its peg to the dollar, trading as low as $0.95, which spiked short-lived fears over the stability and soundness of USDT. Despite the panic, however, Tether successfully financed over $10 billion of redemptions over the last week, with arbitrageurs bringing USDT’s price firmly back to its targeted $1 peg. Reflecting on the events, Ardoini said that the past week was a “clear example of the strength and resilience of Tether.”

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Ardoino also pointed out that USDT has maintained its stability through multiple black swan events or highly volatile market conditions and “never once failed to honor a redemption request from any of its verified customers.” It’s worth noting, however, that Terra’s UST maintained its stability relatively well through volatile market conditions until its collapse last week. USDT has historically held up well in the face of adversity, but Tether has never published a full audit of its reserves since it launched its stablecoin in October 2014. 

Disclosure: At the time of writing, the author of this piece owned ETH and several other cryptocurrencies.

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