Tether has 2023 set as a target date for the complete elimination of all secured loans held in its reserve.
Tether is, by a very big margin, one of the top three organizations working as a Virtual Asset Service Provider (VASP) that is under constant attack from mainstream media due to its reserve. This criticism comes as a direct result of the reserve that Tether maintains.
Tether Holdings Plc, the company that issues the most valuable stablecoin in the world, USDT, recently made public (1) its intentions to eliminate all secured loans from its reserves beginning immediately and continuing until 2023.
This decision was made as a direct reaction to a recent news article published (2) by the Wall Street Journal (WSJ), which claimed, among other things, that the loan product offered by the company poses a potential threat to the entire stablecoin market.
Tether stated that all of its secured loans kept in its reserve
"are overcollateralized and covered by extremely liquid assets" in response to what it dubbed "Fear, Uncertainty, and Doubts" being pushed by the WSJ.
The business has announced that it will begin paying off the secured loan held in reserve to dispel any and all forms of uncertainty regarding its operations. The company believes this strategy is the best to follow in light of the numerous calamities that have struck the cryptocurrency ecosystem this year. These events have caused many stakeholders to question the integrity of those participating in the business.
"After all that has happened this year, it is easy to see why the business has come to the conclusion that regaining consumers' faith is absolutely necessary to the success of the company. "Today, in addition to dismissing the recent cycle of Tether FUD that's hitting the rumor mill, Tether is announcing that starting from now, throughout 2023, it will reduce secured loans in Tether's reserves to zero," Tether said in its official statement. "This is an important step for the Tether ecosystem," Tether said (1).
The company claims that it can simply wind down its operations to keep the community's trust because it is run properly and cautiously.
It was stated that
"Tether risk management has shown over several years to be best in class while dealing with the unjustified fears created by fudders and speculative attempts of a few to take Tether down to the detriment of Tether users who represent the wider community. Tether risk management has shown over several years to be best in class while dealing with the unjustified fears created by fudders and speculative attempts of a few to take Tether down”
Continuous Attacks on Tether's Reserves
Tether is, by a very big margin, one of the top three organizations working as a Virtual Asset Service Provider (VASP) that is under constant attack from mainstream media due to its reserve. This criticism comes as a direct result of the reserve that Tether maintains.
Tether has been forced to respond to the situation to correct misleading information about its firm and to allay the likely fears on its users' minds as a result of the aftereffects of these findings.
The corporation was originally accused of being unable to secure a leading auditing firm at a time to check its stablecoin reserve. This accusation was made at a time when the company was under scrutiny.
Tether Holdings is under the impression that the WSJ is spreading false and misleading information (FUD) to deflect attention away from the top bankruptcy cases involving companies based in the United States. Most of these companies had been media darlings before their respective collapses.
