Abolish secured loans:
The action was taken in reaction to a flurry of FUD and attacks from the mainstream media, especially the Wall Street Journal.
Tether, the largest stablecoin issuer in the world, has promised to gradually stop lending money from its reserves to reestablish trust in the cryptocurrency market.
The stablecoin issuer addressed recent mainstream media FUD (fear, uncertainty, and doubt) regarding its secured loans in a post on December 13, as well as additional FUD that has circulated in the “rumor mill.”
Tether stated that the company would be removing these debts throughout 2023 and that its secured loans are over-collateralized and covered by “highly liquid assets”:
Tether has announced that it will reduce the number of secured loans in its reserves to zero starting today and continuing through 2023.
According to the corporation, Tether’s secured loans function similarly to private banks lending to customers using secured collateral. On the other hand, Tether asserted that its loans are completely guaranteed by over 100%, in contrast to banks that run on fractional reserves.
The decision was probably made in response to a WSJ article published earlier this month that claimed these loans were hazardous. The “business may not have enough liquid assets to cover redemptions in a crisis,” according to the statement.
The Wall Street Journal has already attacked Tether. The publication said in August that a 0.3% decline in Tether’s assets would cause it to be considered “technically insolvent.” At the time, the stablecoin issuer denied the allegations, claiming that working with a top-5 accounting firm has improved its attestations’ reliability and openness.
These attestations state that 82% of the Tether reserves are stored in “highly liquid” assets.
In response to additional media FUD in October, Tether significantly reduced the amount of commercial paper in its reserves and replaced it with U.S. Treasury Bills.
The company said in its most recent statement that it would discontinue its loan operations without incurring losses and keep its commitment to transparency and accountability.
Despite the false narratives and misinformation created by Tether Truthers and the clickbait headlines from mainstream media that have been repeatedly inaccurate about Tether for almost a decade, we will continue to demonstrate Tether’s fortitude in the face of the greatest uncertainty.
With 65.8 billion USDT in circulation and a market share of 46.6%, Tether is the top stablecoin issuer at the moment, according to CoinGecko.