Tether to reduce secured loans to zero in 2023 amid battle against FUD

The world’s largest stablecoin issuer, Tether, has pledged to yet halt the signifier of lending retired funds from its reserves, saying it is “mission captious to reconstruct faith" successful the crypto market. 

In a Dec. 13 post, the stablecoin issuer addressed caller mainstream media FUD (fear, uncertainty, and doubt) concerning its secured loans, among different FUD which person deed the "rumor mill."

Tether reiterated that its secured loans are over-collateralized and covered by “extremely liquid assets,” portion besides adding that the steadfast would beryllium eliminating these loans passim 2023, stating:

Tether is announcing starting from now, passim 2023, it volition trim secured loans successful Tether’s reserves to zero.

Tether’s secured loans run likewise to backstage banks lending to customers utilizing secured collateral, the institution explained. However, dissimilar banks that run connected fractional reserves, Tether claimed that its loans are afloat backed by implicit 100%.

The determination is apt successful effect to a WSJ report earlier this period that alleged these loans were risky. It claimed that the “company whitethorn not person capable liquid assets to wage redemptions successful a crisis.”

#Tether Addresses FUD Around Secured Loans, Reveals Plans to Reduce These to Zero successful 2023https://t.co/nZcPr8RiF1

— Tether (@Tether_to) December 13, 2022

It is not the archetypal clip the WSJ has targeted Tether. In August the outlet said that Tether could be deemed “technically insolvent” if its assets fell conscionable 0.3%. The stablecoin issuer refuted the claims astatine the clip stating that it had accrued the legitimacy and transparency of its attestations by hiring a top-5 accounting firm.

According to those attestations, 82% of Tether reserves are held successful "extremely liquid" assets.

In October, Tether responded to much media FUD by further eliminating commercialized paper from its reserves and replacing the investments with U.S. Treasury Bills.

Related: Crypto Biz: You can’t halt the Tether FUD

In its astir caller statement, the institution stated that it volition upwind down its lending concern without losses and proceed its ngo to prioritize transparency and accountability.

“We volition proceed to amusement Tether’s resilience done the astir uncertain times, careless of the communicative fabrications and disinformation concocted by Tether Truthers and clickbait headlines from mainstream media that person been consistently incorrect astir Tether, for adjacent to a decade.”

Tether is presently the starring stablecoin issuer with 65.8 cardinal USDT circulating giving it a marketplace stock of 46.6%, according to CoinGecko.