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With Tether we are welcoming all that. No, I think this theory is baloney. Get the latest business insights from Dun & Bradstreet. Tether, the largest stablecoin, is a Hong-Kong based stable currency. ConsenSys to Launch zkEVM Testnet as Battle for ZK Supremacy Heats Up, Binance Continues to Battle FUD as US Senators Go After Balance Sheets, Coinbase Moves Into More Stable World of Asset Management with Latest Acquisition, EOS Pumps 10% Amid Broader Market Correction due to EVM Speculation. Tether's commercial paper disclosure places it among global giants Tether had stated since its launch in 2014 that its tokens were fully backed by US dollars in bank accounts, before pivoting in February 2019 to say that its reserves included traditional currency, cash equivalents and other assets and receivables. You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. So while Evergrande may not be on the books, the concern is that the commercial paper may be from other real estate firms. The biggest crypto news and ideas of the day. How the biggest companies plan mass lay-offs, The benefits of revealing neurodiversity in the workplace, Tim Peake: I do not see us having a problem getting to Mars, Michelle Yeoh: Finally we are being seen, Our ski trip made me question my life choices, Apocalypse then: lessons from history in tackling climate shocks, Stablecoins: bitcoin for squares has its own downsides. Evergrande's main unit had 205.7 billion yuan ($32 billion) worth of commercial paper at the end of 2020, filings show. The Node The biggest crypto news and ideas of the day. Today, Bloomberg BusinessWeek reported that stablecoin issuer Tether owns billions of dollars worth of commercial paper issued by large Chinese firms and that it may be using these assets to back up its stablecoin reserves. "While old information about Tether's reserves and so on is public, it keeps growing," Ardoino said. Chinese real estate developers are some of the worlds biggest issuers of commercial paper. Sign up for free newsletters and get more CNBC delivered to your inbox. Tether, Inc. Company Profile | Seattle, WA - Dun & Bradstreet Stablecoin Tether says holds no Evergrande commercial paper Ardoino wouldn't comment on whether the Treasury directly spoke to Tether for the report. Disclosures from cryptocurrency provider Tether suggest it has become one of the worlds largest investors in the US commercial paper market, rubbing shoulders with the likes of fund managers Vanguard and BlackRock and dwarfing the investments of tech giants like Google and Apple, according to estimates from JPMorgan. More Articles Evergrande has now had to suspend trading of that unit's onshore corporate bonds following a downgrade, another red flag pointing towards an impending default. Tether Reviews: What Is It Like to Work At Tether? | Glassdoor The downgrade notice was sent to Evergrande on Sept. 15 from China Chengxin International. In a blog post a few days after its reserves report was released, Hoegner said the commercial paper that the company held was purchased through recognised issuance programmes, the vast majority highly rated, and that there were limits on individual issuers and regional exposures. Tether grants you a limited license to access and make personal use of the Site. We believe that our disclosures thus far prove that all tethers are fully backed with very useful disclosures about the nature of that backing, he added. While Tether (the company) said back in September it doesnt hold Evergrande commercial paper, about a month ago Bloomberg BusinessWeek reported Tethers holdings included billions of dollars of short-term loans to large Chinese companies something money-market funds avoid.. Yet, does Tether truly own a lot of Chinese commercial paper? Bitcoin and other cryptocurrencies were crashing Monday amid a global selloff in risk assets. Well, think of a detective in a movie who takes a corkboard, some photos and a lot of white strings to put all the parts of a story together. "The vast majority of the commercial paper held by Tether is . Evergrandes main unit had 205.7 billion yuan ($32 billion) worth of commercial paper at the end of 2020, filings show. By signing up, you will receive emails about CoinDesk product updates, events and marketing and you agree to our, Bankman-Fried Should Have Only Flip Phone, Website Whitelist, DOJ Says, With Congress Impotent, Courts Are the Only Option for Fighting SEC Overreach, Silvergate Closes SEN Platform Institutions Used to Move Money to Crypto Exchanges, Binance.US Is Operating 'Unregistered Securities Exchange,' SEC Official Says, About half of Tethers roughly $75 billion in assets, Tether (the company) said back in September. Join the most important conversation in crypto and Web3 taking place in Austin, Texas, April 26-28. He also said that Tether did not hold any commercial paper issued by cryptocurrency exchanges or affiliated entities. Or perhaps there are other ways to explain things. The developer on Thursday applied to suspend trading of that unit's. Which countries in the EU are buying the most electric cars? USDT is designed to be pegged to U.S. dollar at a 1:1 ratio, thereby making it possible to trade crypto assets without relying on traditional banking services by providing a stable unit of account. For Ardoino and the team, this highlights the crypto community's faith in Tether. The transformation of value in the digital age. Tethers claims that its virtual currency was fully backed by US dollars at all times was a lie, said attorney-general Letitia James in February. Tether says it doesn't hold any commercial paper issued by Evergrande In a series of tweets about the Evergrande news, partner at Cinnemhian Ventures Adam Cochran, said that IF either Tether or USDC did meltdown in a global collapse though, itd actually be bullish for crypto, as if you couldnt use them to cash out, people would just start bulk converting them into BTC/ETH regardless of price., Cochran added that, despite not being a well-known name in the West, the failure of Evergrande could have massive fallout. Ardoino joined Tether back in late 2015 as a developer before being appointed chief technology officer around a year later. A government bailout is also a possibility. In an interview, stablecoin Tether's tech chief Paolo Ardoino lays out the case for holding commercial paper in its reserves. Those questions can only be answered with a little more transparency from the stablecoins issuer. Since Tether doesnt disclose specifics about the commercial paper that substantially backs its stablecoin, this is a bit like serving a houseguest a sandwich and loudly assuring them that it is absolutely NOT made from diseased horsemeat. We are completely confident.". The transformation of value in the digital age. But he did lay out his timeline expectations for regulation. Tether has become one of the most important components of the cryptocurrency ecosystem, with more than 35bn tethers printed so far this year, more than double its supply in January. You can subscribe to get the full newsletter here. HONG KONG, Sept 16 (Reuters) - Tether, the world's largest 'stablecoin', said in a statement it does not hold any commercial paper or securities issued by embattled developer China Evergrande Group (3333.HK), as regulatory scrutiny into risks from this type of token grow. Tethers are today, and have always been, fully backed by assets sufficient to cover the amount of tethers in circulation, Hoegner said of its latest disclosure. Commercial paper typically has low default rates. Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. This story was seen first on BeInCrypto Join our Telegram Group and get trading signals, a free trading course and more stories like this on BeInCrypto, Ukraine Latest: Russia Continues Efforts to Encircle Bakhmut, INSIGHT-Before fatal collapse, Turkish building had skirted code thanks to Erdogan policy, In Chicago, adapting electric buses to winters challenges, Ukraine ally Kallas fights for reelection in Estonia vote, Global race to boost electric vehicle range in cold weather. Our Standards: The Thomson Reuters Trust Principles. The most recent report from accountant Moore Cayman shows more than 50% of the assets backing a tether coin were commercial paper and certificates of deposit, rather than dollars, or short-term government paper. David Z. Morris is CoinDesk's Chief Insights Columnist. Though its main product since its founding in the 1990s has been housing, Evergrande has grown into a huge conglomerate with products ranging from bottled water to electric cars to a soccer team. You will receive a link to create a new password via email. Tether published its first Reserves Breakdown in March 2021. Such holdings of companies short-term debt would make it the seventh largest in the world. How China's Property Market Could Trigger a Crypto Crash Get this delivered to your inbox, and more info about our products and services. First Mover The latest moves in crypto markets, in context. His role is much broader than tech chief. Just last month, Bitfinex, Tethers parent company, tried to block CoinDesk from accessing the specifics of its commercial paper holdings by filing a petition in New York Supreme Court. Is Evergrande's Fall Influencing the Depeg Issue for Tether? The value of loans backing Tether's stablecoin reserves could be a risk factor for the crypto industry. USDT might get blown up by Evergrande and you should know - Publish0x Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers. A wave of smaller stock frauds from 2010-2016 were chronicled in the documentary The China Hustle, and Luckin Coffee put an exclamation point on the trend in 2019. The Chinese real-estate giant is facing down $300 billion in debt that it cant pay back. 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As we have indicated in our published statements and our most recent assurance attestation with a reporting date of June 30, 2021, the vast majority of the commercial paper held by Tether is in A-2 and above rated issuers.. BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back. This license does not include nor permit your resale or commercial use of the Site or its contents. This type of debt financing is back in the limelight as China's second largest property developer Evergrande teeters on the brink of default. Hundreds of customers have protested in front of the companys offices alleging mistreatment or fraud. By signing up, you will receive emails about CoinDesk products and you agree to ourterms & conditionsandprivacy policy. Evergrande's main unit had 205.7 billion yuan ($32 billion) worth of commercial paper at the end of 2020, filings show. The most recent attestation states the average credit rating of its commercial paper holdings is "A-1" - an. After a couple of decades of relative freedom for entrepreneurs (including, as mentioned, the apparent freedom to commit securities fraud), Chinese leadership under Xi Jinping has begun to aggressively intervene in markets. He holds Bitcoin, Ethereum, and small amounts of other crypto assets. Consider this - most of the reserve assets Tether holds to support its USDT are commercial papers (CPs) and certificate of deposits (CDs) instead of the US dollar. All evidence points to tether's CP as a formal accounting trick to say "we just give a bunch of Tether to FTX, Binance, and Cumberland as stand in for USD to provide liquidity". According to the Financial Times, this makes Tether one of the world's largest investors in the US commercial paper market. Learn more about Consensus 2023, CoinDesks longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Weve got lots of inquiries and heard lots of discussion, but have not seen any active participation, said Deborah Cunningham at Federated Hermes.Until last week we hadnt really heard of them, said a trader at a large bank. A theory that Tether has been buying Evergrande commercial paper and In response to the Bloomberg BW report, it released a blog post claiming that the report is spreading misinformation.. "So Tether is extremely glad that there is a USDC, that there is Paxos and all the other stablecoins, because that is how we become an industry.". In addition to being a major real estate developer, Evergrande is also China's largest issuer of commercial paper (very short-term corporate bonds). But the firm has not clarified the exact details of its debtors. Last March, the Federal Reserve stepped in to buy commercial paper as the pandemic led money market funds, one of the biggest buyers, to pull back. Balancing Innovation and Regulation: Why a Risk-Based Approach to Crypto Could Benefit America, Crypto Price Predictions, March 2023: Altcoins Are About to Take a Wild Turn, Top 10 Telegram Channels for Crypto Signals in 2023, Binance Accused of Malpractices Similar to FTX, Navigating Crypto Taxes Made Easy & Cheap: Meet Cryptiony. Before falling into a major crisis, Chinese property developers had issued commercial paper worth 3.6 trillion yuan ($556 billion) in 202020% higher from 2019. "An industry is not an industry if there is only one player, instead having many players with different offerings with different use cases is really helpful in a moment when you have to talk with the regulator," Ardoino said. recently accused of violating securities laws. And it could offer savvy investors the opportunity to hedge against the Tether Bomb an affectionate term for the fact that nobody really From 2018 onwards, new stablecoins have been pouring onto the markets. Money Reimagined The transformation of value in the digital age. However, as Tethers reserve holdings have been questioned by regulators such as the New York attorney-general in the past, providing banking services to Tether will likely raise reputational risk concerns, wrote the JPMorgan analysts. Questions for Cramer? Cramer says take crypto profits, cites Evergrande-related tether - CNBC What financial advisors need to know about crypto. Tethers previous public attestations include various short-term deposits and commercial paper kept as reserves to back the USDT stablecoin. We use cookies to improve your experience. ; ; Vergleich; ; ; ; Can it be liquidated to meet redemptions? Thus, it has grown 19-fold in a matter of two dozen months. It seems increasingly likely that Evergrande is fated instead for the glue factory. Tether says it doesn't hold any commercial paper issued by Evergrande The New York attorney-generals office declined to comment on whether Tethers disclosure, which came in the form of a single-page PDF, was sufficient to meet its requirement on reporting as part of Februarys settlement. Lawrence Lewitinn is CoinDesk's managing editor of global capital markets. The stablecoin issuer says its goal is to reduce its commercial paper holdings to zero. Overall, the studio has a watchful eye. HONG KONG (Reuters) - Tether, the world's largest 'stablecoin', said in a statement it does not hold any commercial paper or securities issued by embattled developer China Evergrande Group, as regulatory scrutiny into risks from this type of token grow. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. Crypto Long &. "Tether has maintained its stability . The Evergrande Group is the second-largest property developer in China by sales. How Ethereum's evolution impacts crypto markets. Stablecoin Tether says holds no Evergrande commercial paper For critics of Tether, the new economy of digital assets is based on the worlds oldest profession: real estate speculation. The company has more than $300 billion in total liabilities and recently warned investors it may default on its debts. China to order developers to disclose commercial paper debt - Reuters Evergrande, which has total liabilities of more than $300 billion, is also in the spotlight as it scrambles to raise funds, teetering between a messy meltdown with . USDT leads the stablecoin market by trading volume and acts as the top base-pair currency for trading across several large crypto exchanges, including Binance, FTX, and others. But these have frequently raised more questions than answers. Approximately half of Tether's $62.8 billion assets as of the end of June 2021, were backed by commercial paper and certificates of deposit, according to the company. Krypto. Head to consensus.coindesk.com to register and buy your pass now. We do not give personalized investment advice or other financial advice. "We are working with an amazing counterparty that is extremely professional and has a deep knowledge of traditional finance and also crypto markets and the blockchain industry and so on. The. We use A stock exchange filing added that Evergrande was added to a watch list for possible further downgrades in the future. Regulators are starting to pay greater attention to stablecoins - digital tokens which are pegged in value to other assets, often the U.S. dollar, and backed by a pool of assets - and some observers have raised concerns about the tokens' liquidity in a time of stress. How much of it is Chinese or specifically from Evergrande is unclear. We believe that this is the only way that these technologies are really created and can become mainstream.". read more. "Don't let it become a loss. What financial advisors need to know about crypto. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. He takes the lead in the majority of the company's communications, while the CEO and CFO stay firmly in the background. A government bailout is also a possibility. It is now the third-largest cryptocurrency by market capitalisation, according to CoinMarketCap, making up the bulk of stablecoin volume. "I think that it's a little bit aggressive, or cocky, to ask that everyone in the world use US agencies, or US auditing companies - otherwise it does not matter, or is not fine," he said. The latest moves in crypto markets, in context. Even the chance to speak to Ardoino is rare. Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. It was news to us.. Additionally, it is China's largest issuer of commercial paper with more than $300 billion in debt, according to reports. The enshittification of apps is real. Crypto investors need to be alert while the Evergrande situation unfolds even if they don't personally own tether because the stablecoin is used to purchase bitcoin and ether, Cramer said. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. Regulators are starting to pay greater attention to stablecoins digital tokens which are pegged in value to other assets, often the U.S. dollar, and backed by a pool of assets and some observers have raised concerns about the tokens liquidity in a time of stress. document.write('