Instead of holding commercial paper, Tether has replaced the investments with US Treasury Bills (T-Bills).
The news comes just a few months after the USDT issuer said it would completely remove commercial paper from its reserves, and is a route the company has pursued as it looks to increase transparency around its stablecoin reserves.
Tether has eliminated over $30 billion dollars of commercial paper without any losses, a proof of how Tethers’ reserves are conservatively and professionally managed. Tether has also increased its direct exposure to US Treasuries by more than $10 billion in the last quarter.(2/3)
— Tether (@Tether_to) October 13, 2022
Tether CTO Paolo Ardoino affirmed in May that USDT was fully backed, and in July 2022, Tether announced its CP holdings were on track to fall below $3.5 billion.
Ardoino then said in August that the stablecoin issuer’s commercial paper holdings would drop below $200 million at the end of the month and to zero by the end of October 2022. In September, the company revealed that its CP holdings had dropped below $50 million.
In all, Tether has managed to eliminate $30 billion worth of commercial paper from its reserves.
USDT reserves in more US Treasury bills
On the company’s website, Tether shows it holds 54.57% in US Treasury Bills and 15.89% in Commercial Paper and Certificates of Deposit.
The total reserves breakdown shows Cash & Cash Equivalents and Other Short-Term Deposits & Commercial Paper make up 79.62% of the USDT reserves, with 8.36% in other investments that include digital tokens, 6.77% in secured loans and 5.25% in corporate bonds, funds and precious metals.
Going by these percentages, replacing commercial paper investments with T-Bills increases the latter’s overall holdings under cash and cash equivalents to 70.46%.
US T-Bills means Tether now backs its USDT with the “most secure, liquid reserves in the market,” the company noted.