Tether, the issuer of the dollar-pegged stablecoin USDT, has just detailed the composition of its reserves for the first time since 2014, The Block reports.
According to the company, as of March 31, Tether held 76% of its reserves in cash and cash equivalents. In particular, the cash and cash equivalents category is essentially formed by commercial paper with a 65% proportion. Regarding the rest of its reserves, fiat deposits, reserve repo notes, treasury bills and actual cash represented 24%, 3.6%, 3% and 3.87%, respectively.
Some might be surprised by the fact that only 3.87% of its reserves are kept in real cash, however, the company general counsel Stuart Hoegner has said that it is “misleading to focus exclusively on cash” within the cash and cash equivalents category. According to him, “readers should not confuse items not in ‘actual cash’ with a lack of liquidity.”
As for the remaining 25% of the reserves, they are divided into secured loans (12.55%), corporate bonds, funds and precious metals (around 10%) and other investments, which include digital tokens (1.64%).
We should remember that the project has been surrounded by a lot of controversy due to the fact that while Tether claimed 100% of its tokens were backed by $1, the company did not really provided proof of it. Until now, as this is the first time that Tether releases a detailed breakdown of its reserves.