Tether Pledges To Stop Lending Out Funds From Its Reserves
Tether, the issuer of the world’s largest stablecoin USDT, has vowed to stop the practice of lending out funds from its reserves. It has taken it upon itself to restore faith in the crypto market.
The company’s secured loan, as per a Wall Street report, was 9% – about $6.1 billion of its total assets as of September 30. But then, Tether is stated to not have enough liquid assets to pay redemptions if there was a crisis because of the loans. But the stablecoin issuer argued that the secured loans in its reserves are overcollateralized and covered by extremely liquid assets.
#Tether Addresses FUD Around Secured Loans, Reveals Plans to Reduce These to Zero in 2023https://t.co/nZcPr8RiF1
— Tether (@Tether_to) December 13, 2022
In a blog post, Tether said its professionally and conservatively managed and this will be demonstrated by successfully winding down the lending business without losses. The company would continue to show resilience even in the face of uncertainty irrespective of mainstream media’s click-bait headlines, story fabrications and concocted disinformation. Moreover, the platform cut its commercial paper to zero in October because of pressure from the community about the quality of these reserves.
At the time of writing this article, Tether’s stablecoin UST was down by 0.03% in the last 24 hours. It is regarded as the leading stablecoin with 65.8 billion in circulation with a market share of 46.6%.