Coinspeaker Tether Plans to Eliminate Secured Loans Held in Its Reserve in 2023
Tether Holdings Plc, the issuer of the world’s largest stablecoin, USDT has announced plans to reduce the secured loans in its reserves to zero beginning from now until 2023. The move came in response to a recent news report from the Wall Street Journal (WSJ) alleging among other things that the company’s loan product can serve as a risk to the entire stablecoin market. Addressing what it called FUD (Fear, Uncertainty, and Doubts) being spread by the WSJ, Tether said all of its secured loans held in its reserve and “are overcollateralized and covered by extremely liquid assets.”
The company said it is making the move to wind down the secured loan in its reserve in a bid to wade off any form of doubts in its operations. The firm said this approach is ideal considering the recent mishaps that have befallen the crypto ecosystem this year which have left many stakeholders to continue questioning the integrity of players in the industry.
“Understandably, after the events that have unfolded this year, the company recognizes that it is mission-critical to restore faith in the market. Today, in addition to dismissing the recent cycle of Tether FUD that’s hitting the rumor mill, Tether is announcing starting from now, throughout 2023, it will reduce secured loans in Tether’s reserves to zero,” Tether said in its official statement.
The company said the fact that it is professionally and conservatively managed accounts for why it can easily wind down its operations to maintain the trust in its community.
“Tether risk management has shown over several years to be best in class while dealing with the unjustified fears created by fudders and speculative attempts of a few to take Tether down to the detriment of Tether users which represent the wider community,” it said.
Tether and Attack on Its Reserve
By a very large margin, Tether comes off as one of the top three companies operating as a Virtual Asset Service Provider (VASP) that receives a constant attack from mainstream media per its reserve.
From concerns about the backing of its reserves to market manipulation and the liquidity rating of its Commercial Papers at a time, Tether has had to rise to the occasion to correct misinformation about its business and to allay the likely fears on its user’s minds based on the aftermath of these reports.
The company was once accused at a time of being incapable of securing a top auditing firm to verify its stablecoin reserve. However, Coinspeaker reported in August that the stablecoin issuer has tapped BDO Italia, a top 5 accounting firm to help in the attestation of its reserves.
As far as Tether Holdings is concerned, it believed the FUD being spread by WSJ is an attempt to shift the focus from the top bankruptcy cases of companies from the US, most of which had been media darlings up until their respective implosions.
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Tether Plans to Eliminate Secured Loans Held in Its Reserve in 2023