The central theses
- Tether’s most recent accounting report shows that the bulk of its reserves consist of cash and cash equivalents and short-term debt.
- The company held 1.64% of its $ 41 billion reserves of digital assets as of March 31, 2020.
- The independent accounting firm Moore Cayman confirmed the report as “correctly stated”.
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Tether has released the breakdown of its consolidated reserves report, which shows that the majority of its reserves are made up of low-risk cash and cash equivalents.
Tether announces reserve assets
The disclosure statement states that 75.85% of reserves are covered by cash or cash equivalents in commercial papers, fiduciary funds and bonds. The remainder is made up of secured loans (12.55%), bonds and commodities (9.96%) and other investments including digital assets (1.64%).
Most of these financial instruments are short-term debts from large corporations, governments, or banks. The reserves also include gold in support of its gold-backed stablecoin, XAUT.
By the end of the first quarter, Tether had assets of over $ 41 billion and owed stablecoin investors and creditors $ 40.8 billion.
The accounting report was certified by Moore Cayman, a Cayman Island-based auditor, who determined that the “evidence received is sufficient and adequate” to support their certification.
Stuart Hoegner, General Counsel at Tether, told Crypto Briefing in an email:
“The documentation released today shows once again that Tether is fully supported and we look forward to continuing to share this information on a quarterly basis.”
Tether has issued four stablecoins: USDT, EURT, CNHT and XAUT. USDT accounts for more than 99% of total liabilities.
The New York Justice Department had charged iFinex, the parent company of Bitfinex and Tether, with manipulating their books. The two sides reached a $ 18.5 million settlement in February. Under the terms of the settlement, Tether is required to provide quarterly reports to the DoJ and improve the company’s transparency. Confidence in USDT has increased in the last few weeks following the Moore Cayman audit and a surprising Coinbase Pro listing.
It is the first stablecoin issuer to release a detailed report on its assets. So far, US regulated companies in Circle have only released a short, certified report, similar to Tether’s first disclosure last month.
USDT is the most liquid stablecoin in the world. Shipments exceeded $ 50 billion on April 25.
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