During a recent Twitter Spaces event discussing stablecoins and the recent crypto volatility, Tether CTO Paolo Ardoino said that the stablecoin provider had cut the amount of commercial paper backing its stablecoin by half. Ardoino is also the CTO of crypto exchange Bitfinex.
"In the last six months, [Tether has] reduced 50% the size of the commercial papers. Everything that was reduced from the commercial paper was rolled into U.S. Treasuries," he said. "In the next few weeks, we will have the new attestation that will show that these commercial papers are being further reduced."
Commercial paper is a type of security issued by large corporations to pay for short-term debt obligations like inventory or payroll.
The Spaces event included other members of the crypto industry including Samson Mow of Jan3 and Adam Back of Blockstream, among others. Michael Soetaert, a U.S. Senate candidate representing Kansas, was also present.
Tether (USDT) is the industry's largest stablecoin by market capitalization and is reportedly backed by a variety of financial assets.
USDT's backing has included cryptocurrencies, loans, corporate bonds, precious metals, cash, and cash equivalents, according to Tether's transparency report.
Tether's latest formal attestation indicates that cash, cash equivalents, short-term deposits, and commercial paper make up 83.74% of all the Tether circulating on the market.
Of that figure, nearly 37% is made up of commercial paper and certificates of deposit. Treasury bills make up roughly 52%. The 37% figure is from December so, in light of Ardoino's comments about a 50% reduction over six months, it's unclear if Tether's commercial paper holdings are now around 18.5% or some other amount.
Tether is famously opaque about its operations, and has repeatedly refused to subject itself to a public audit by a major accounting firm.
Tether did not immediately reply to a request for comment as to why the stablecoin's backing has changed, or what percentage of the company's current reserves consist of commercial paper.