Tether Moves Most of its USDT Collateral to US Treasury Bonds

The majority of USDT collateral is now in US Treasuries. Stablecoin issuer Tether has reduced its positions in commercial securities over the past six months, Bloomberg has reported citing the company’s CTO Paolo Ardoino.

According to him, the share of collateral in private papers “continues to decline.” He has explained that this reserve structure allows the company to quickly meet its USDT redemption requirements.

Amid the collapse of the cryptocurrency market, on May 12, the price of USDT briefly lost parity against the US dollar. Ardoino has stressed that the company had no problems with repayment of obligations.

According to the expert, the collapse of the algorithmic stablecoin UST was due to the extremely rapid growth of the asset. Because of this, Terra could not guarantee a refund in the event of a fall in the price of cryptocurrencies.