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In response to a round of mainstream media attacks on its ability to meet redemptions in the event of financial stress, Tether Holdings, the company that issues stablecoin tether (USDT-USD), said it will reduce secured loans in its reserves to zero throughout 2023, according to a recent blog post.
At the beginning of December, The Wall Street Journal raised concerns about Tether’s increased lending of its own tokens to customers and whether it has enough liquid assets to fund redemptions in a crisis.
In an effort to dismiss “the recent cycle of Tether FUD that’s hitting the rumor mill,” the stablecoin issuer “has reiterated that the secured loans held in its reserves are overcollateralized and covered by extremely liquid assets,” it said.
Taking that into account, Tether claimed it will phase down its lending business without losses, and “we will continue to show Tether’s resilience through the most uncertain times, regardless of the story fabrications and disinformation concocted by Tether Truthers and click bait headlines.”
Earlier this week, (Dec. 12) A gang was arrested by Chinese police for laundering $1.7B via USDT.