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Tether Transfers Majority of USDT Collateral to US Treasury Bonds


Most of the USDT collateral comes from US Treasuries. Over the past six months, the issuer of the stablecoin Tether has reduced positions in commercial securities, Bloomberg writes, citing the company’s technical director Paolo Ardoino.

According to him, the share of collateral in private papers “continues to decline.” He explained that such a reserve structure allows the company to quickly meet its USDT redemption requirements.

“The worst case scenario is that Tether will simply become smaller,” the CTO added.

On May 12, amid the collapse of the cryptocurrency market, the price of USDT briefly lost parity against the US dollar. Ardoino stressed that the company had no problems with repayment of obligations – over the past 24 hours, it has bought assets worth $ 600 million.

According to the expert, the collapse of the algorithmic stablecoin UST is due to the extremely rapid growth of the asset. Because of this, Terra could not guarantee a refund in the event of a fall in the price of cryptocurrencies.

Ardoino also stated that UST was basically the income farming tool in the Anchor protocol. In his opinion, this was another reason for the collapse of the ecosystem, as the asset lacked real use cases.

Recall that in March, the media reported that the American hedge fund Fir Tree Capital Management took a “significant” short position against USDT. The structure allegedly counted on the fall in the value of securities from the reserves of the stablecoin issuer.

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My profession is a journalist, but my hobby for 8 years has been studying Forex investing and trading. During this time, I managed to gain extensive experience in investing and trading cryptocurrencies and double my capital in the Forex market. To be the author of this magazine, the site owners invited me to participate in one of the 2020 trading webinars, and I will try to reveal the most relevant crypto market news for you.

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