Tether plays it safe
Tether wants more safety for its stablecoin USDT.
Tether wants more safety for its stablecoin USDT. According to CTO Paolo Ardoino, this should be achieved by reducing the amount of riskier assets in the portfolio.
As Tether's Chief Technology Officer Paolo Ardoino noted on Oct. 3 in a Twitter postView post on X, the stablecoin project has recently cut its holdings of so-called "commercial papers" to under $50 million.
"Commercial papers" are short-term debt instruments that companies issue to raise financing. At the same time, Tether increased the share of U.S. Treasury Bills in its portfolio, and it now holds 58.1% of its assets in U.S. T-bills.
Such government bonds would be more stable than commercial papers because they carry theoretically zero default risk. They’re considered a safe investment option because the trust and the U.S. government's creditworthiness guarantee that interest and principal will be paid on time.
In June, hedge funds piled pressure on the stablecoin Tether. Within a month, Tether had to cover $16 billion in redemptions, wiping out almost 20% of its reserves.
