Tether Upholds $3.3 Billion Liquidity Buffer, Affirms USDT Transparency in Latest Report

Tether, the prominent stablecoin issuer, continues to uphold a substantial liquidity cushion of approximately $3.3 billion, a strategic move aimed at ensuring stability within the Tether ecosystem and fostering confidence among stakeholders.

The latest report on Tether’s reserves, released on August 24th, sheds light on a collective surplus of shareholder capital amounting to $3.29 billion, effectively distributed across 15 different blockchain ecosystems. While Tether reserves the right to issue USDT tokens in the millions within various ecosystems, it’s noteworthy that Algorand and Polygon stand out as exceptions.

Among the ecosystems, Solana emerges as the leader in terms of pre-authorized issuance value, boasting an impressive $1.57 billion. Following suit are Ethereum and Tron, securing the second and third positions with issuance pre-authorizations of $617 million and $353 million, respectively.

Despite these revelations, Tether has yet to respond to inquiries from CryptoGrafos regarding the significance of preauthorization in terms of maintaining transparency and cultivating trust, especially among the broader public.

In a comprehensive analysis, Tether’s assets collectively tally up to $86.1 billion, while total liabilities amount to $82.8 billion. This juxtaposition reaffirms a notable reserve coverage of over 100%.

However, it’s essential to discern that Tether’s other stablecoins, such as XAUT, EURT, MXNT, and CNHT, do not benefit from the same robust liquidity cushion as USDT. The report underscores that these other stablecoins issued by Tether lack the necessary balances to effectively cushion and uphold a 1-1 peg, especially in times of market turbulence.

In a marked shift, Tether’s transparency report directly challenges persistent concerns surrounding the liquidity and asset backing of the stablecoin. Notably, in October 2021, Tether incurred a fine of $41 million from the Commodity Futures Trading Commission (CFTC) for disseminating “false” information regarding its reserve holdings. However, no recent transparency reports by Tether have been flagged by authorities in the two years since that incident.

More recently, Tether made the decision to discontinue its Bitcoin version of USDT, known as Bitcoin OmniLayer. While no fresh Tether tokens will be issued on the Bitcoin Omni Layer, Kusama, or Bitcoin Cash moving forward, redemption options will remain accessible for a minimum of one year from the announcement date.

The OmniLayer team expressed encountering challenges due to the lack of widespread tokens and the growing availability of USDT on alternative blockchains. Consequently, exchanges began utilizing alternative transport layers instead of Omni. Tether has indicated a potential reconsideration of reissuing the Omni Layer version if Omni’s utilization experiences a resurgence.

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