Commercial Paper Reserves Of Tether Under Heavy Regulatory Scrutiny
July 30 2021 - 11:00PM
NEWSBTC
Tether has been facing a lot of pressure from regulatory
authorities. Now, the attention of the watchdogs has shifted to its
commercial paper reserve. As a result, this week has been very hot
for the company. The regulators focus their attention on what makes
up the Tether reserves. Related Reading | Cardano Aims To
Facilitate Users With Smart Contracts A report disclosed that
Tether’s Michael Hsu said that the US regulators focus their
attention on the paper to know if every Tether Token is actually
backed by $1 as the company claims. US Regulators Scrutinize Tether
From what we learned, the regulators investigating Tether are led
by Janet Yellen, the US Treasury Secretary. Before now, Yellen has
held some meetings about the possible risks of stablecoins. Now,
the ” President’s Working Group on Financial Market” aims to know
if Tether really holds large amounts of commercial papers as it
claims. Commercial papers usually represent debt instruments that
companies issue to investors for short-term funds. However, the
Working Group does not believe the claims as it compares it to a
mutual fund that can lose its investors in one day. Presently, the
total USDT in circulation is 62 billion. So, there seems to be a
legitimate cause for alarm. The crypto market is back in the
bullish mode as BTC climbs above the $40k mark | Source: Crypto
Total Market Cap on TradingView.com Last two months, Tether had
revealed the composition of its total reserves. According to the
stablecoin, it had more instruments that were not just cash or cash
equivalents, such as bonds, secured loans, bitcoin, and a larger
portion comprising of commercial papers. Related Reading | Tether
To Conduct An Audit To Negate Claims Concerning Transparency While
talking with sources, Stuart Hoegner, the Tether general counsel,
revealed that the company is planning a thorough audit in some
months to come. Let’s recall that Tether hasn’t carried out such
audits before now, and the announcement helped a lot of investors
to breathe easier. However, on July 19, Yellen was heard asking
lawmakers to establish rules that will guide stablecoins in the
financial market. More Calls on Crypto regulations After calling
for regulations on stablecoins, Yellen received a letter nine days
later from Senator Elizabeth Warren asking her to push for greater
regulation for the cryptocurrency industry as a whole. During a
hearing of the “Senate Banking Committee,” Warren also stated her
negative position about the crypto industry. According to her, it
was better to hand over the financial systems to giants banks than
some nameless and faceless, shadowy miners and super-coders.
Related Reading | Anthony Di Lorio To Leave Cryptocurrency
Space For Philanthropic Initiatives However, during the hearing, an
Anderson Kill Law partner, Preston Byrne, stated that the most
frightening of all is that Elizabeth Warren is in control of the
financial system. Elizabeth is a democrat who has been serving as a
United States Senator since 2013. Featured image from Pixabay,
chart from TradingView.com
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