evergrande tether commercial paper

About half of Tethers roughly $75 billion in assets, which back USDT, is in commercial paper. HONG KONG (Reuters) - Tether, the world's largest 'stablecoin', said in a statement it does not hold any commercial paper or securities issued by embattled developer China Evergrande Group, as regulatory scrutiny into risks from this type of token grow. Many stablecoin companies have followed Tether's lead both with attestation and the use of commercial paper. Sign up for The Node, our daily newsletter bringing you the biggest crypto news and ideas. How Ethereum's evolution impacts crypto markets. This license does not include nor permit your resale or commercial use of the Site or its contents. He also shares his expectations on stablecoin regulation and competition. First Mover The latest moves in crypto markets, in context. About half of Tether's roughly $75 billion in assets, which back USDT, is in commercial paper. Cramer said his crypto concerns right now begin with tether, a stablecoin that's pegged to the U.S. dollar. "In the end, this industry is more than $2 trillion and it's important to have clear guidelines and clear rules and so on. Since Tether doesnt disclose specifics about the commercial paper that substantially backs its stablecoin, this is a bit like serving a houseguest a sandwich and loudly assuring them that it is absolutely NOT made from diseased horsemeat. Sign up for notifications from Insider! Get this delivered to your inbox, and more info about our products and services. Regardless of what commercial paper you hold, bonds and commercial paper would take a hit and some issuers may even fold," tweeted Adam Cochran, partner at Cinneamhain Ventures. Chinese real estate developers are some of the worlds biggest issuers of commercial paper. read more. Hundreds of customers have protested in front of the companys offices alleging mistreatment or fraud. New Tether Report Shows 17% Reduction in Commercial Paper What financial advisors need to know about crypto. Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. We believe that our disclosures thus far prove that all tethers are fully backed with very useful disclosures about the nature of that backing, he added. The downgrade from A to AA applies both to the bonds and their issuer rating. What should a secular society really look like? Learn more about Consensus 2023, CoinDesks longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Your weekly wrap of Web3 news and trends. In addition to being a major real estate developer, Evergrande is also China's largest issuer of commercial paper (very short-term corporate bonds). Tether does not hold any commercial paper or other debt or securities issued by Evergrande and has never done so, the company said. Another 18 per cent is held in fiduciary deposits, more than 12 per cent in secured loans and nearly 10 per cent in corporate bonds, funds and precious metals. Work - Tether Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts. A stock exchange filing added that Evergrande was added to a watch list for possible further downgrades in the future. Chinese real estate developers are some of the world's biggest issuers of commercial paper. A theory that Tether has been buying Evergrande commercial paper and Ardoino joined Tether back in late 2015 as a developer before being appointed chief technology officer around a year later. Evergrande was successful in raising around $8 billion by August, according to a report from Bloomberg, but it is just a drop in the pan compared to what it still owes. Stablecoin Tether says holds no Evergrande commercial paper Tether has amply demonstrated, most recently through assurance opinions from [auditor] Moore Cayman, that all issued tethers are, in fact, fully reserved, he added. But it could still take Tether with it, depending on whats actually in that stablecoin sandwich. Cramer stressed he still sees potential for cryptocurrencies to go "mainstream," but believes it's important to lock in at least some gains while they're still there. "Tether said they have no Evergrande exposure," Cramer acknowledged. And despite it seeming as though the stablecoins are in competition, Ardoino believes this will be key to success with regulators. The developer on Thursday applied to suspend trading of that unit's. cookies Evergrande, for its part, is the largest commercial paper issuer in China's real estate market, owning some $32 billion worth of commercial paper at the end of last year. All Rights Reserved. Evergrande has now had to suspend trading of that units onshore corporate bonds following a downgrade, another red flag pointing towards an impending default. It has tried to quell the heightened concerns expressed by mainstream financial media regarding its dollar reserves. Evergrande, which has total liabilities of more than $300 billion, is also in the spotlight as it scrambles to raise funds, teetering between a messy meltdown with . Tether Owns Billions In Chinese Debt: Bloomberg Report The outlet estimated that the actual figure could be even higher, since it has other units, which also issue commercial paper. Tether's Paolo Ardoino on Reserves, Regulation and Evergrande Tether grants you a limited license to access and make personal use of the Site. BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back. "It's impossible to reach these levels of success in such a short time without genuine organic interest and really wide demand from the broader crypto trading industry," Paolo Ardoino, Tether's chief technology officer, told Insider in a recent interview. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. Tether Reviews: What Is It Like to Work At Tether? | Glassdoor Evergrande's main unit had 205.7 billion yuan ($32 billion) worth of commercial paper at the end of 2020, filings show. Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Now onto the crypto context, if you have not guess it already, Tether's USDT that tracks the value of the US dollar is backed by a significant amount of Chinese commercial paper. var plc588602 = window.plc588602 || 0; "Tether does not hold any commercial paper or other debt or securities issued by Evergrande and has never done so," the company said. Approximately half of Tether's $62.8 billion assets as of the end of June 2021, were backed by commercial paper and certificates of deposit, according to the company. Stablecoins are rarely on the tips of investors' tongues when it comes to talking about the volatility-filled headline-grabbing crypto market. Find company research, competitor information, contact details & financial data for Tether, Inc. of Seattle, WA. In February, the operator and the related trading platform Bitfinex pledged to offer more transparency on its reserves under the terms of an $18.5m settlement with the New York attorney-generals office, leading to the most recent disclosures last month. For critics of Tether, the new economy of digital assets is based on the worlds oldest profession: real estate speculation. HONGKONG Tether, the worlds largest stablecoin, said in a statement it does not hold any commercial paper or securities issued by embattled developer China Evergrande Group, as regulatory scrutiny into risks from this type of token grow. "So if you own crypto in any form and you've got big gains, I recommend taking something off the table.". "Tether does not hold any commercial paper or other debt or securities issued by Evergrande and has never done so," the company said. As we have indicated in our published statements and our most recent assurance attestation with a reporting date of June 30, 2021, the vast majority of the commercial paper held by Tether is in A-2 and above rated issuers.. Learn more about Consensus 2023, CoinDesks longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Bitcoin, meanwhile, remained above all-time highs by about 5.5%. Lab leak theory: 3 years on, will we ever know where COVID came from? Got a confidential news tip? analyse how our Sites are used. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. In those two years, bitcoins market cap has gone up eight times, from $159 billion to $1.3 trillion. Tether is completely unbacked USD that gives these exchanges the liquidity they need to market make derivatives that have non-linear . Yet, does Tether truly own a lot of Chinese commercial paper? The Node The biggest crypto news and ideas of the day. A report from the end of 2020 shows that Evergrande has just around 10% of the money owed. The Evergrande Group is the second-largest property developer in China by sales. Tether: hat 50 % der USDT-Reserven in Commercial Paper-Bestnden "So if A1 commercial paper rated by a US Agency is considered safe [then] why is where the issuer located matters?". The developer on Thursday applied to suspend trading of that unit's onshore corporate bonds following a downgrade, which market participants said indicated an increasing likelihood of defaults and restructuring. The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Is the Evergrande crisis pushing Bitcoin, Tether markets on - AMBCrypto That marks a significant decrease in commercial paper, from $24 billion to $20 billion in the first quarter of 2022. How the biggest companies plan mass lay-offs, The benefits of revealing neurodiversity in the workplace, Tim Peake: I do not see us having a problem getting to Mars, Michelle Yeoh: Finally we are being seen, Our ski trip made me question my life choices, Apocalypse then: lessons from history in tackling climate shocks, Stablecoins: bitcoin for squares has its own downsides. But since it's unsecured, there is also very little recourse for investors if an issuer does default. "There is an entire world outside of the US," Ardoino said. However, as Tethers reserve holdings have been questioned by regulators such as the New York attorney-general in the past, providing banking services to Tether will likely raise reputational risk concerns, wrote the JPMorgan analysts. Tether Reports 17% Decrease in Commercial Paper | Alexandria You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. CoinDesk journalists are not allowed to purchase stock outright in DCG. Ardoino wouldn't comment on whether the Treasury directly spoke to Tether for the report. So while Evergrande may not be on the books, the concern is that the commercial paper may be from other real estate firms. Or perhaps there are other ways to explain things. "The only interest of Tether is maintaining a liquid and extremely safe portfolio," he said. Sell some, stay long the rest, then let's wait and see if China changes its attitude toward an Evergrande bailout.". All evidence points to tether's CP as a formal accounting trick to say "we just give a bunch of Tether to FTX, Binance, and Cumberland as stand in for USD to provide liquidity". Evergrande, China's second-largest property developer, is to blame. But he did lay out his timeline expectations for regulation. Now, the second-largest stablecoin, circle (USDC), is heading in a different direction, choosing to only use cash reserves and cash equivalents. Be a smarter, safer investor in eight weeks. Which countries have embraced a 4-day workweek and hows it going. When Tether launched in 2014, it said every tether coin was fully backed by US dollars in bank accounts. See here for a complete list of exchanges and delays. Tether has faced scrutiny from authorities and investigators in the past. The most recent attestation states the average credit rating of its commercial paper holdings is "A-1" - an investment grade based on the ratings scale of Moody's Investor Services, a ratings agency. Sign up for free newsletters and get more CNBC delivered to your inbox. The tumble appears to have been triggered by the mounting problems at embattled property giant China. Cramer has a position in ether, which runs on the Ethereum blockchain. 2023 CNBC LLC. Tether said that it funnelled roughly half its reserves into commercial paper. The "Mad Money" host said the struggles of Chinese developer Evergrande are likely to keep weighing on crypto markets. var pid588602 = window.pid588602 || rnd; According to Reuters, around 50% of Tethers $62.8 billion in held assets at the beginning of July 2021, was backed by commercial paper and certificates of deposit. It earned this title after the Chinese government banned the company from issuing longer-term debt. But tether's growth of around 3,350% since early 2019 is seen as reason to celebrate. "The case is you have two choices, you trust the rating agencies, or you don't trust them. promo A commercial paper report from Evergrande at the end of 2021 showed its main unit had $32 billion, just around 10% of its total liabilities. Can it be liquidated to meet redemptions? Evergrande has now had to suspend trading of. Tether is a typical design firm that will value the client's needs over their employees. According to Bloomberg BW, stablecoin issuer Tether has extended billions of dollars in loans to Chinese companies. A commercial paper report from Evergrande at the end of 2021 showed its main unit had $32 billion, just around 10% of its total liabilities. China to order developers to disclose commercial paper debt - Reuters Analysis: Goldman Sachs faces hard sell for its consumer assets, Ex-Goldman banker Ng deserves 15 years in prison, US prosecutors say, Reporting by Alun John A Bloomberg report has claimed to have found that Tether holds billions of dollars worth of Chinese commercial paper. Evergrande's main unit had 205.7 billion yuan ($32 billion) worth of commercial paper at the end of 2020, filings show. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. Stay up to date with what you want to know. Money Reimagined The transformation of value in the digital age. and other data for a number of reasons, such as keeping FT Sites reliable and secure, According to the Financial Times, this makes Tether one of the world's largest investors in the US commercial paper market. Perhaps, if one were to scale tether on a different Y-axis like so: Perhaps the tail wags the dog. "The problem with tether is that it's backed by various holdings and roughly half of those are commercial paper short-term loans and much of that is believed to be, but we don't know, Chinese commercial paper," Cramer said. They are, in theory, backed by reserves, such as short-term government bonds and the currency itself. How the Evergrande Bankruptcy Could Crash Stocks, Crypto In fact, Tether, has been accused multiple times that their stablecoin is not backed by dollar reserves in the full amount of its market cap of $69 billion. The developers debt is spread across an army of banks and other financial institutions, leading some analysts to worry that its collapse would have systemic impacts comparable to the fall of Lehman Brothers, which kicked off the Great Recession 13 years ago. The developer on Thursday applied to suspend trading of that unit's. "While old information about Tether's reserves and so on is public, it keeps growing," Ardoino said. Tether, the largest stablecoin, is a Hong-Kong based stable currency. Tether, Bitcoin and Chinese Commercial Paper at Scale Webinars Indices Markets Finance Technology Web3 Policy Sponsored Content Upcoming event Yuga Labs, Google and More TV & Videos TV & Videos. In a blog post a few days after its reserves report was released, Hoegner said the commercial paper that the company held was purchased through recognised issuance programmes, the vast majority highly rated, and that there were limits on individual issuers and regional exposures. While Tether (the company) said back in September it doesnt hold Evergrande commercial paper, about a month ago Bloomberg BusinessWeek reported Tethers holdings included billions of dollars of short-term loans to large Chinese companies something money-market funds avoid.. Among other signs of serious mismanagement, customers have made large deposits on Evergrande apartments that were never built. In total, Tether holds 52% US Treasury bonds, 37% commercial paper, with the remainder in cash and money market funds. ConsenSys to Launch zkEVM Testnet as Battle for ZK Supremacy Heats Up, Binance Continues to Battle FUD as US Senators Go After Balance Sheets, Coinbase Moves Into More Stable World of Asset Management with Latest Acquisition, EOS Pumps 10% Amid Broader Market Correction due to EVM Speculation. Evergrande's main unit had 205.7 billion yuan ($32 billion) worth of commercial paper at the end of 2020, filings show. Elon Musks Twitter is dying a slow and tedious death. The stablecoin issuer says its goal is to reduce its commercial paper holdings to zero. He said that the New York attorney-general had no clear findings that customers at any point were at risk of being unable to redeem tethers because of a lack of backing. Last March, the Federal Reserve stepped in to buy commercial paper as the pandemic led money market funds, one of the biggest buyers, to pull back. Tethers defenders can say that even if one were to assume Tether spent half of every dollar it is said to have taken in over the past two years on commercial paper in China, that would be under one-fifth of new issuances and 4% of the market. The biggest crypto news and ideas of the day. Tether, Bitcoin and Chinese Commercial Paper at Scale In response to the Bloomberg BW report, it released a blog post claiming that the report is spreading misinformation.. read more. Chinas loose and reactive (at best) financial regulatory environment is one reason anxiety around Tether has largely centered on whether it holds Chinese commercial paper in general not just whether it holds Evergrandes. Join the most important conversation in crypto and Web3 taking place in Austin, Texas, April 26-28. Stablecoin Tether clarified that while they do hold commercial paper, none of it is from Evergrande. No, I think this theory is baloney. Tether, Inc. Company Profile | Seattle, WA - Dun & Bradstreet Your weekly wrap of Web3 news and trends. Call Cramer: 1-800-743-CNBC, Want to take a deep dive into Cramer's world? Be a smarter, safer investor in eight weeks. As a result, even though Tether says it doesn't hold commercial paper issued by Evergrande, an upheaval in the commercial paper market could still have wider . Commercial paper is a form of unsecured, short-term debt issued by companies that doesn't need to be registered with the Securities and Exchange Commission (SEC) as long as it matures before nine months. As demand for tether grew, market participants started to question whether that was the case. We believe that this is the only way that these technologies are really created and can become mainstream.". The company has more than $300 billion in total liabilities and recently warned investors it may default on its debts. The New York attorney-generals office declined to comment on whether Tethers disclosure, which came in the form of a single-page PDF, was sufficient to meet its requirement on reporting as part of Februarys settlement. While Tether (the company) said back in September it doesn't hold Evergrande commercial paper, about a month ago Bloomberg BusinessWeek reported Tether's holdings included "billions of. Commercial paper typically has low default rates. "An industry is not an industry if there is only one player, instead having many players with different offerings with different use cases is really helpful in a moment when you have to talk with the regulator," Ardoino said. The downgrade from A to AA applies both to the bonds and their issuer rating. Stablecoin Tether says holds no Evergrande commercial paper - Yahoo! USDT is designed to be pegged to U.S. dollar at a 1:1 ratio, thereby making it possible to trade crypto assets without relying on traditional banking services by providing a stable unit of account. The systematic suppression that characterizes Chinese markets adds an opaque but potentially huge risk for the holders of any Chinese asset even if that risk is wrapped up in a supposed stablecoin. Tether published its first Reserves Breakdown in March 2021. Overall, the studio has a watchful eye. In absolute terms, the sizes look something like this: A chart like the one above doesnt give a sense of the rate of growth for each, but this does: Bitcoin and USDT look somewhat related, but does one move as a function of the other? But this is not just about one company: Even if Tether doesnt specifically hold any of Evergrandes short-term debt, it could have huge exposure in the form of other Chinese obligations. Analysis-Investors grappling with Evergrande fallout weigh risk of wider pain, This sprinting robot could become your next beach lifeguard, Domino effect as more EU institutions ban TikTok on work devices, TikTok is setting time-limits for teens. What financial advisors need to know about crypto. Stablecoin Tether says holds no Evergrande commercial paper In May, it provided a breakdown of these reserves, which Tether claims included just under $30bn in commercial paper, a short-dated investment similar to cash. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. "The vast majority of the commercial paper held by Tether is . As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. This article is excerpted from The Node, CoinDesks daily roundup of the most pivotal stories in blockchain and crypto news. A government bailout is also a possibility. Understanding the magnitude of size and growth of USDT, bitcoin and Chinese commercial paper may help give some perspective to the latest headlines. That type of heavy-handed control is at the core of Chinas conundrum as an authoritarian state trying to reap the rewards of capitalism. The company is currently under investigation by multiple law enforcement agencies, including the U.S. Department of Justice and the Federal Bureau of Investigation. Well, think of a detective in a movie who takes a corkboard, some photos and a lot of white strings to put all the parts of a story together. Tether Claims to Hold no Commercial Paper From Struggling Evergrande This story was seen first on BeInCrypto Join our Telegram Group and get trading signals, a free trading course and more stories like this on BeInCrypto, Ukraine Latest: Russia Continues Efforts to Encircle Bakhmut, INSIGHT-Before fatal collapse, Turkish building had skirted code thanks to Erdogan policy, In Chicago, adapting electric buses to winters challenges, Ukraine ally Kallas fights for reelection in Estonia vote, Global race to boost electric vehicle range in cold weather. He takes the lead in the majority of the company's communications, while the CEO and CFO stay firmly in the background. You will receive a link to create a new password via email. The US Office of the Comptroller of the Currency has released guidance saying that banks can take deposits from stablecoin issuers only if the coins are fully backed by reserves. Regulators are starting to pay greater attention to stablecoins digital tokens which are pegged in value to other assets, often the U.S. dollar, and backed by a pool of assets and some observers have raised concerns about the tokens liquidity in a time of stress. "If tether collapsed, well, then it's going to gut the whole crypto ecosystem," he said. HONG KONG, Sept 16 (Reuters) - Tether, the world's largest 'stablecoin', said in a statement it does not hold any commercial paper or securities issued by embattled developer China Evergrande Group (3333.HK), as regulatory scrutiny into risks from this type of token grow. He holds Bitcoin, Ethereum, and small amounts of other crypto assets. At the end of 2020, it had $32 billion worth of commercial paper. Head to consensus.coindesk.com to register and buy your pass now. Stanley will arrange a new seating arrangement sporadically.

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