Tether broke its 1:1 peg with the dollar as cryptocurrencies fell, dropping to as low as 95 cents
Tether, the world’s largest stablecoin, boosted its holdings of U.S. government debt by over 13% to $39.2 billion, while cutting its exposure to riskier commercial paper in the first quarter of 2022, the company said on Thursday.
Stablecoins – a variety of cryptocurrencies designed to keep a steady value – are in sharp focus in the wake of the crypto sector’s sell-off last week.
Tether broke its 1:1 peg with the dollar as cryptocurrencies fell, dropping to as low as 95 cents, according to CoinMarketCap, before recovering.
In its first report on the status of its reserves since the sell-off, Tether said that it had cut its exposure to riskier commercial paper – short term debt issued by companies – by around 17% to $19.9 billion.
Since the Q1 report was written, Tether has reduced its commercial paper by an additional 20%, Tether Chief Technology Officer Paolo Ardoino said in a statement.
Stablecoins, usually underpinned by reserves of traditional assets such as dollars, gold and government debt, are widely used in cryptocurrency trading.