Tether confirms its CRR: strong reserves and increased vouchers
Tether confirms its CRR: strong reserves and increased vouchers
Stable Coin

Tether confirms its CRR: strong reserves and increased vouchers

By Patrick Verardi - 11 Nov 2022

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Today, Tether Holdings Limited, the asset-backed crypto stablecoin, made available its latest quarterly assurance opinion completed by BDO, one of the top five independent public accounting firms in the world. 

The attestation reaffirms the accuracy of Tether’s Consolidated Reserves Report (CRR), which breaks down the assets held by the group as of 30 September 2022.

The CRR demonstrates the strength of its reserves, revealing massive reductions in commercial paper investments near zero and an overall increase in US Treasury bonds.

Tether delivers on promises: all CPs have been repaid 

The latest news reveals that Tether’s reserves are extremely liquid, and the majority of its investments, constituting 82% of total assets, are held in Cash & Cash equivalents and other short-term deposits. 

In addition, Tether has shown a massive reduction in commercial paper with exposure representing only 0.07% of reserves as of the date of the report. 

Not only that, Tether also reduced its commercial paper exposure by more than $24 billion without loss during 2022, fulfilling both its promise and commitment to the community to do so. 

In fact, the last remaining CPs were fully repaid in early October 2022. US Treasury bonds now also make up a significant portion of Tether’s reserves with a direct exposure of more than 58%.

Therefore, following what Tether’s CRR indicates, the independent BDO attestation confirms that the group’s consolidated assets exceed its consolidated liabilities.

Specifically, the Company’s management as of 30 September 2022 stated the following:

“The total consolidated assets of the Group amount to at least US $ 68,061,618,458. The Group’s total consolidated liabilities amount to US $ 67,811,510,720, of which US $ 67,805,112,981 relating to issued digital tokens. The consolidated assets of the Group exceed the consolidated liabilities.”

Paolo Ardoino, CTO of Tether, also made important statements on the matter, in part to reassure users following the collapse of FTX

“Tether is proud to present this latest reserve consolidated report which once again amplifies its position as a leader in transparency. This attestation is further proof of our commitment to our community and ability to deliver on our promises.”

Indeed, the fact that Tether is a trustworthy organization is demonstrated by providing facts and through its actions. With near-zero CP, more US Treasury bonds than ever before, and highly liquid investments, Tether proves to be the most widely used and trusted stablecoin on the market. 

In addition, Ardoino reported that the company is profitable and an additional $60 million was added to its excess reserves in the last quarter

So, the outlook for the next quarter is very positive and people are already looking forward to the next attestation. 

USDT withstands market uncertainties 

All the latest communications regarding the Tether stablecoin are reassuring following the collapse of FTX and the repercussions on the entire crypto market. 

Yesterday, Paolo Ardoino, the CTO of Tether, had already stated via a tweet that despite the difficulties, Tether had processed about 700 million redemptions in the last 24 hours. Thus, the stablecoin can be used without any problems. 

The fear of most stems from the fact that Tether’s Stablecoin, USDT, had dropped in price, coming in 1% below the dollar price. Indeed, its USDT stablecoin last reached such price levels during the May Terra implosion and the related UST stablecoin.

This is why Tether’s outside representative also intervened and tried to calm the waters, stating that Tether currently has no credit to FTX or Alameda Research.

Tether’s tokens appear to be 100% guaranteed by reserves, and the assets supporting the reserves exceed the liabilities, as confirmed by the CRR. 

It is important to remember the functionality of Tether, which as stablecoin, is based on establishing a fixed price of the cryptocurrency against a fiat currency of different value, another cryptocurrency or a commodity, in order to reduce its volatility. 

So, according to the latest reported data, Tether seems to be fulfilling its function and promise despite adverse market conditions. 

Specifically, Tether’s stablecoin USDT, is pegged to a stable reserve asset that is based on the US dollar (USD), so the value of a Tether coin will also correspond to the exchange rate of one dollar.

What is BDO, the accounting network that is also involved in Tether 

BDO, short for Binder Dijker Otte, is an international network of public accounting, tax and business consulting firms that provides professional services under the name BDO and is the fifth-largest accounting network globally.

In the year 2021, the global fees of the network’s member firms, including members of their exclusive alliances, totaled $11.8 billion. 

Each BDO member firm is an independent legal entity in its own country. Founded in 1963 as the Binder Seidman International Group by companies from Canada, Germany, the Netherlands, the United Kingdom and the United States, the network is coordinated by BDO Global Coordination BV, based in Zaventem, Belgium. 

Specifically, the name BDO was adopted by the organization in 1973, as it is composed of the initials of the three founding companies-Binder (UK), Dijker (Netherlands) and Otte (Germany). 

Among many, BDO has been providing professional services to Tether since August 2022, when Ardoino announced the change of auditor for the stablecoin. Specifically, the audit of reserve accounts changed from quarterly to monthly for Tether, certified by BDO Italy. 

This is because disclosing the composition of reserves in detail is critical for a dollar-anchored stablecoin with a parity ratio like Tether. 

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