Tether, which issues stablecoin ‘USDT’, has denied claims that suggest it holds Chinese real estate giant Evergrande issued commercial paper as a reserve for its dollar-backed stablecoin.
A spokesperson from Tether told crypto news media The Block that Tether has never held any commercial paper issued by Evergrande. They said:
“Tether does not hold any commercial paper or other debt or securities issued by Evergrande and has never done so. As we have indicated in our published statements and in 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.”
Tether previously revealed its underlying assets back in August which noted that 85% of its $ 62.8 billion reserve assets were held in “cash and cash equivalents, other short-term deposits, and commercial paper”.
However, Tether has not yet offered clarifications on where this commercial paper is based from. In August, it reported the commercial paper publisher’s rating and maturity date but has not yet disclosed the specific publisher.
When asked by The Block if Tether held any commercial paper from China, the company said it holds commercial paper from a global publisher and did not disclose further information.
The statement came as Evergrande’s liquidity crisis deepens. The property giant has over $300 billion in liabilities after it notified Chinese banks of not being able to pay loan interest due Sept. 20.
In a recent article on livewiremarkets.com, Nucleus Wealth chief strategist David Llewellyn-Smith noted:
“This $300bn debt monster is potentially China’s Lehmann Brothers, trading in subterranean junk debt to Chinese (and global) counterparties (which may include Bitcoin via Tether) at spreads that imply insolvency. There is no realistic scenario for restructuring Evergrande in which market dislocation is avoided. It is only about how much pain the Chinese government can bear.”