By Elizabeth Howcroft and Hannah Lang
LONDON (Reuters) – Tether, the world’s largest stablecoin, said on Thursday it has boosted its holdings of U.S. government debt while cutting exposure to riskier assets, the first look at its reserves since the token was rocked by the crypto sector’s recent sell-off.
Usually underpinned by reserves of assets such as dollars, gold and government debt, stablecoins are widely used in cryptocurrency trading – with Tether the predominant medium for moving funds between crypto or into regular cash.
The token, run by a British Virgin Islands company, is designed to hold a value of $1. Tether promises it has sufficient reserves to allow all holders of the over-$70 billion worth of Tether in circulation to exchange their tokens for dollars.
Tether said it boosted its holdings of Treasuries by over 13% to $39.2 billion and cut its exposure to riskier commercial paper – short term debt issued by companies – by around 17% to $20.1 billion in the first quarter.
Tether said its reserves totalled $82.4 billion as of March 31, with some $82.3 billion in liabilities. It has reduced its commercial paper holdings by an extra 20% since the Q1 report was written, Chief Technology Officer Paolo Ardoino said.
(The story refiled to correct after Tether says it cut commercial paper to $20.1 bln, not $19.9 bln)
(Reporting by Elizabeth Howcroft in London and Hannah Lang in Washington; editing by Tom Wilson and David Gregorio)