The Chief Technical Officer of Tether and Bitfinex, Paolo Ardoino, recently told the media that the developers are working on improving the reserve of the USDT stablecoin project. He was addressing the attendees during a Twitter space gathering recently. Ardoino claimed that he had decided to transfer a larger portion of USDT reserves into the US Treasuries.
He further explained that the organization behind Tether stablecoin has been reducing its reserve peg from the commercial paper holdings for the last six months. At present, there is a sense of FUD present among all stablecoin investors of the crypto community. The FUD is the result of the 99.9% market value crash of its contemporary stablecoin LUNA/UST.
The havoc wreaked by the UST downfall has put all the stablecoin investors and issuers on high alert. Ardoino arranged the recent Twitter space interview to address some of the concerns of the USDT investors. Nevertheless, on-chain analysis indicates that USDT is not immune from the massive inflation pressure. At present, USDT’s $1 position fluctuated to $0.95 and managed to retain the $0.9988 position.
USDT Will Not Lose its Peg
At present, the biggest fear of the stablecoin investors is seeing their investment losing its peg to its reserves. In the case of the UST stablecoin, there are speculations that the peg was broken due to the external intervention of the US Treasury Department or hackers. To appease the fear among the investors, USDT management recently issued a public statement claiming that nothing out of ordinary is happening at the moment.
The statement further exclaimed that Tether has managed to weather several black swan events over the years and survive the volatile market pressure. As per the statement, the significant liquidity of Tether in the crypto market is a good safety net for its investors. Furthermore, the reserve of Tether is highly diversified, including a mixture of fiat currencies, short-term treasury bills, money market funds, and commercial paper holdings with A-2 and above ranking.