Tether told about USDT collateral structure

14.05.2021 |

Tether published a detailed report on the state of the security capital of its cryptocurrency USDT. The last time such data was announced seven years ago, when the company launched Stablecoin in 2014. The report shows that more than three-quarters of coins are backed by traditional currencies and liabilities denominated in fiat money.

65% of the mass of traditional currency collateral is placed in bills of exchange, but specific counterparty issuers of the securities are not named. Fiduciary deposits hold 24%, 3.6% in repo transactions, and 3% in Treasury bills. Only 3.87% remains in the cache. At the same time, the company explains its reluctance to keep all money only in cash by the fact that liquidity can be provided by various instruments, and not only by constantly depreciating national currencies.

The rest of the reserves are distributed into three categories:

  • 12.5% was issued as secured loans to non-affiliates,
  • 10% invested in corporate bonds, funds and precious metals,
  • the rest was used to purchase other cryptocurrencies.

The latter point was chosen at Tether to diversify inflation risks. This approach is currently used by many companies, including those in the public sector.

The company’s desire to provide internal reporting to the public is explained by the desire to increase the transparency of the organizational structure, and therefore increase the trust of USDT users.