Reported that the supposedly secure crypto asset 'Tether' is lending a large amount to a large Chinese company, concerned about Tether's 'bank run'



Bloomberg, an overseas media dealing with financial information, announced on October 7, 2021

that Tether, the publisher of the crypto asset 'Tether ', told a large Chinese company while the management difficulties of the Evergrande Group in China were being talked about. We released a report saying that we are making a large amount of loans. Tether states that it 'does not hold the debt of the Evergrande Group, ' but reports that if it develops into a credit problem, it could lead to a run on the bank, which is flooded with investors to withdraw funds. Has been done.

Crypto Mystery: Where's the $ 69 Billion Backing the Stablecoin Tether? --Bloomberg
https://www.bloomberg.com/news/features/2021-10-07/crypto-mystery-where-s-the-69-billion-backing-the-stablecoin-tether

Dollar and peg tether of encryption assets that are trading at a fixed rate of almost '1USDT (tether) = 1 dollar' stable coin is. Therefore, it has attracted attention as a stable crypto asset that does not fluctuate in price like Bitcoin.



On the other hand, some people are saying to Tether, 'I doubt if it really has the same value as the dollar.' That's because Tether, the company that issues tethers, has issued 69 billion tether tokens so far, of which 48 billion were issued in 2021. Issuing 69 billion tether tokens means holding $ 69 billion worth of funds, which is one of the top 50 banks in the United States. The amount. However, since Tether is not a bank, there is no system to rigorously examine whether it actually owns that much assets.

A Tether official

once said in a podcast that 'we are registered with the Financial Security Intelligence Agency of the British Virgin Islands.' However, Errol George, the director of the agency, denied the question as to whether he oversees Tether, saying, 'We have never done anything to Tether, and we have never done it.' that's right.

In response to these concerns, Tether explains on its official website that 'all tethers are 100% backed by reserves.' In addition, according to the material released by the company, '30 billion dollars (about 3.3 trillion yen) of the assets held are unsecured promissory notes issued by companies for short-term financing. It is described as ' a commercial paper (CP)'.

According to a document on the breakdown of Tether's reserves obtained by Bloomberg, Tether's assets include billions of dollars in short-term loans to large Chinese companies. The document also stated that 'Tether is collateralizing Bitcoin and lending billions of dollars to other crypto companies.'



'Most of Tether's CPs are highly valued by credit rating agencies, and bitcoin-backed loans,' Tether's lawyer Stuart Hegner said in a question about assets. The borrower has to collateralize a bitcoin that is higher than the loan amount, so it is a low risk. ' However, he declined to say whether he owns the CP of a Chinese company other than the Evergrande Group.

In this regard, Bloomberg said, 'Tether's financing to Chinese companies has potential implications, because if there is any failure to recover the funds, it is worth 1 USDT. Will be less than $ 1. Investors who own tethers can request the redemption of tethers, but if other investors cash in on their own, the funds will go down. It will be exhausted, which means that the installation turmoil will begin. '

In response to Bloomberg's report, Tether issued a statement denying the article on the official website. In it, 'Bloomberg's coverage is just what the industry has seen many times, extracting pieces of old news from suspicious sources here and there and applying them to pre-prepared scenarios. '.

According to the statement, most of Tether's CPs are issued by companies with an A-2 or higher rating. However, there is no mention of whether or not there is a loan to a Chinese company.

Tether Responds to Bloomberg BusinessWeek Article | Tether

https://tether.to/tether-responds-to-bloomberg-businessweek-article/

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