Amid the crypto market FUD and in order to reestablish trust in the customers, Tether, the biggest stablecoin issuer in the world, has promised to reduce its secured loans in reserves to zero in the coming year.
The stablecoin issuer addressed recent mainstream media FUD (fear, uncertainty, and doubt) over its secured loans in a post on December 13 as well as additional FUD that has circulated in the “rumor mill.”
Tether said that the company will be removing these debts throughout 2023 and that its secured loans are over-collateralized and supported by “highly liquid assets“:
Tether is announcing starting from now, throughout 2023, it will reduce secured loans in Tether’s reserves to zero.
According to the corporation, Tether’s secured loans function similarly to private banks lending to consumers using secured collateral. On the other hand, Tether said that its loans are completely guaranteed by over 100%, in contrast to banks that run on fractional reserves.
The decision was probably made in reaction to a WSJ article published earlier this month that claimed these loans were hazardous. The “business may not have adequate liquid assets to cover redemptions in a crisis,” according to the statement.
The Wall Street Journal has already attacked Tether. The publication said in August that a 0.3% decline in Tether’s assets would cause it to be considered “technically bankrupt.”
At the time, the stablecoin issuer denied the allegations, claiming that by working with a top-5 accounting firm, it has improved the reliability and openness of its attestations.
These attestations state that 82% of the Tether reserves are stored in “highly liquid” assets.
In response to more media FUD in October, Tether significantly reduced the amount of commercial paper in its reserves and replaced it with U.S. Treasury Bills.
The firm said in its most recent statement that it would discontinue its loan operations without incurring losses and that it will keep up its commitment to openness and accountability.
“We will continue to show Tether’s resilience through the most uncertain times, regardless of the story fabrications and disinformation concocted by Tether Truthers and clickbait headlines from mainstream media that have been consistently wrong about Tether, for close to a decade.”
With 65.8 billion USDT in circulation and a market share of 46.6%, Tether is the top stablecoin issuer at the moment, according to CoinGecko.
