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Tether’s Reserve Report Sparks Debate: Is the Stablecoin Still 100% Backed?

Published by
Qadir AK

The cryptocurrency world is no stranger to scrutiny and transparency demands. In line with this ethos, Tether, a titan of the stablecoin industry, has just unveiled the contents of its recently updated reserve report.

The report has sparked a lot of debate, with some analysts praising Tether for its transparency and others raising concerns about the composition of its reserves.

A Snapshot of Tether’s Assets and Liabilities

As of August 24, Tether reported an impressive total asset pool valued at US$86.1 billion. In contrast, the stablecoin giant revealed liabilities amounting to US$82.8 billion. This disparity between assets and liabilities results in a commendable reserve ratio that comfortably crosses the 100% mark. Such a position indicates a liquidity buffer of $3.29 billion, an essential metric for any financial entity, offering a safety net across its operations on 15 distinct blockchains.

Also Read: Tether Now Holds More U.S. Treasuries Than Australia, UAE, and Spain

Terra’s Multi-Bagger Profile!

Tether isn’t just about US dollars. The company’s holdings span multiple currencies, each pegged on a 1-to-1 basis to their respective fiat counterparts. Here’s a quick breakdown:

  • US Dollar Tether (USD₮) holds the lion’s share with approximately $82.8 billion.
  • Euro Tether (EUR₮) accounts for €36.4 million.
  • Chinese Yuan Tether (CNH₮) stands at around ¥20.5 million.
  • Gold Tether (XAU₮), intriguingly, has reserves equivalent to ℥246,524.33 of gold.
  • The Mexican Peso Tether (MXN₮) wraps up the list with a total of $19.6 million.

Diversifying is Key

Tether’s vast asset base isn’t hoarded on a single platform. Instead, it’s judiciously distributed across multiple blockchains to ensure optimal liquidity and functionality:

  • Ethereum and Tron lead the way, handling assets worth $39 billion and $42.8 billion, respectively.
  • Solana oversees nearly $1.9 billion, while the Omni platform manages close to $888 million.
  • Blockchains like Avalanche, Tezos, and Algorand respectively host hundreds of millions in Tether assets, demonstrating the stablecoin’s broad reach.

Tether keeps a significant capital reserve. This additional liquidity cushion ensures stability within the Tether ecosystem, providing an extra layer of assurance for users. This commitment isn’t just a one time affair. The reserves are periodically reviewed, further cementing the company’s dedication to its user base and the broader crypto community.

Qadir AK

Qadir Ak is the founder of Coinpedia. He has over a decade of experience writing about technology and has been covering the blockchain and cryptocurrency space since 2010. He has also interviewed a few prominent experts within the cryptocurrency space.

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