Chinese Securities Once Backed the World’s Largest Stablecoin USDT: Bloomberg
Bloomberg reported that New York’s Attorney General has released documents revealing that Tether Holdings Ltd., the issuer of the world’s largest stablecoin, USDT, once held securities issued by Chinese companies as part of its reserves. The disclosure comes after years of speculation and scrutiny surrounding the assets backing Tether’s stablecoin.
New York’s Attorney General shed light on Tether’s holdings
In October 2021, a Bloomberg investigation uncovered evidence suggesting that Tether’s reserves included billions of dollars in short-term loans to Chinese companies and a substantial loan to the crypto platform Celsius Network. At the time, Tether denied any exposure to the debt of the crisis-hit China Evergrande Group but remained silent on its holdings of other Chinese securities.
According to the disclosed documents, Tether had holdings of securities issued by prominent state-owned Chinese companies, such as Industrial & Commercial Bank of China Ltd., China Construction Bank Corp., and Agricultural Bank of China Ltd. The maturity dates of these securities range from 2020 to 2021. Additionally, Tether’s holdings included securities issued by companies like Deutsche Bank AG, Barclays Bank Plc, and ArcelorMittal SA.
Tether’s banking relationships were outlined in the documents, showing accounts held at Deltec Bank & Trust, Ansbacher (Bahamas) Limited, Capital Union Bank, and Far Eastern International Bank. The stablecoin issuer also held reserve assets in funds at Bradbury Investment and Metis Global Partners. Additionally, Tether had reserves in US dollars, Bitcoin held on Bitfinex (an affiliated crypto exchange), and over $2 billion worth of reserves in gold storage.
Why this is Concerning?
The documents also revealed Tether’s significant lending program, which involved issuing loans in USDT to third parties. As of March 31, 2021, the program reached $5.1 billion, with collateral in the form of digital assets or securities.
The quality of assets supporting USDT has long been a topic of concern due to the stablecoin’s crucial role in cryptocurrency markets. Traders rely on USDT, which has a circulation of approximately $83.5 billion, for liquidity and stability.
Read About USDT Depegging on June 15…
CoinGape reported that this USDT depegging maybe the beginning of something big, read more about why?
- XRP to $9? Analysts Tip ‘XRP Is a Buy’ as Price Targets 200% Surge
- CZ Endorses Hyperliquid Rival Aster DEX, Token Rallies 1,500%
- Tom Lee’s BitMine Adds $84M in ETH as Expert Predicts Ethereum Rally to $5K
- Grayscale’s Crypto Index Fund Sees ‘Solid Start’ as SOL, XRP Institutional Demand Climbs
- Senate Democrats Urge Republicans for ‘True Collaboration’ to Quickly Pass CLARITY Act
- PUMP Price Forecast: Whale Buys 1B Tokens as Bullish Pennant Signals 65% Breakout
- Bitcoin Price Prediction: Analyst Highlights Breakout Patterns as Coinbase CEO Backs Crypto Structure Bill
- Dogecoin Price Prediction: Grayscale ETF Move Aligns With Cycle Breakout
- Chainlink Price Prediction: Whales Scoop 2M LINK as Analysts Eye 184% Breakout Rally
- Shiba Inu (SHIB) Price Prediction: Massive SHIB Burn and 80-Week Cycle Mirroring Past Rallies: Will History Repeat?
- Cardano Price Stays Above Ichimoku Cloud as Grayscale ADA ETF Approval Nears
Why Trust CoinGape
CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
