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. Your Use of the Site. Evergrande's main unit had 205.7 billion yuan ($32 billion) worth of commercial paper at the end of 2020, filings show. To counteract that line of questioning, Tether secured attestations on its financial statements - a review from an independent accountant, rather than a full audit - on the reserves. Tethers claims that its virtual currency was fully backed by US dollars at all times was a lie, said attorney-general Letitia James in February. Evergrande is the biggest issuer of commercial paper in the Chinese real estate market, according to Reuters. Which countries in the EU are buying the most electric cars? According to the attorney-generals investigation, there were instances when Tether was not fully backed in the past. Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts. "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. 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. The US Treasury is expected to release an in-depth report on stablecoins any day now. That type of heavy-handed control is at the core of Chinas conundrum as an authoritarian state trying to reap the rewards of capitalism. Or perhaps there are other ways to explain things. Tether does not hold any commercial paper or other debt or securities issued by Evergrande and has never done so, the company said. promo Tether Claims to Hold no Commercial Paper From Struggling Evergrande "The vast majority of the commercial paper held by Tether is . With Tether we are welcoming all that. Tether Owns Billions In Chinese Debt: Bloomberg Report Stanley will arrange a new seating arrangement sporadically. While the embattled housing giant ultimately made its scheduled payment of $148 million, questions persist about the long-term prospects for it and other real estate developers in China. Probing the intersection of crypto and government. In November 2018, it had to transfer a substantial portion of its backing to Bitfinex after a loss of funds, meaning that it no longer met its claim of being fully backed by US dollars. 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. This article is excerpted from The Node, CoinDesks daily roundup of the most pivotal stories in blockchain and crypto news. Sign up for free newsletters and get more CNBC delivered to your inbox. Decentral Media, Inc. is not an investment advisor. 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. Tether published its first Reserves Breakdown in March 2021. Tether's market capitalization surged 357% in the last year to around $69 billion. Can it be liquidated to meet redemptions? 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? Tether says it doesn't hold any commercial paper issued by Evergrande Now, the second-largest stablecoin, circle (USDC), is heading in a different direction, choosing to only use cash reserves and cash equivalents. Krypto. 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. The company also denied holding any Evergrande debt and claims to hold only commercial paper issued by A-2 and above-rated companies, which it claims to be risk-free. madcap@cnbc.com. 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. Such holdings of companies short-term debt would make it the seventh largest in the world. See here for a complete list of exchanges and delays. Tether's commercial paper disclosure places it among global giants The tumble appears to have been triggered by the mounting problems at embattled property giant China. A stock exchange filing added that Evergrande was added to a watch list for possible further downgrades in the future. But it could still take Tether with it, depending on whats actually in that stablecoin sandwich. recently accused of violating securities laws. 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. Earlier this year, Tether and Bitfinex settled one of those battles over its reserves with the New York state Attorney General. "There is an entire world outside of the US," Ardoino said. However, Tether is very secretive about its holdings, only disclosing that it does hold international commercial paper. This was later repaid by Bitfinex. But these have frequently raised more questions than answers. Chinese real estate developers are some of the worlds biggest issuers of commercial paper. Bitcoin, meanwhile, remained above all-time highs by about 5.5%. At the same time, hot topics such as regulation, competition and the Evergrande debt crisis are shining a spotlight on that "old information". Evergrande's main unit had 205.7 billion yuan ($32 billion) worth of commercial paper at the end of 2020, filings show. Weve got lots of inquiries and heard lots of discussion, but have not seen any active participation, said Deborah Cunningham at Federated Hermes.Until last week we hadnt really heard of them, said a trader at a large bank. Tether Reviews: What Is It Like to Work At Tether? | Glassdoor For critics of Tether, the new economy of digital assets is based on the worlds oldest profession: real estate speculation. Cramer has a position in ether, which runs on the Ethereum blockchain. USDT might get blown up by Evergrande and you should know - Publish0x In total, Tether holds 52% US Treasury bonds, 37% commercial paper, with the remainder in cash and money market funds. Tether said that it funnelled roughly half its reserves into commercial paper. Tether's Paolo Ardoino on Reserves, Regulation and Evergrande "The case is you have two choices, you trust the rating agencies, or you don't trust them. Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. Stablecoin Tether says holds no Evergrande commercial paper 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 . As one of the first stablecoins, Tether's experienced its fair share of controversies, particularly surrounding the reserves that back its eponymous coin. The developer on Thursday applied to suspend trading of that unit's. 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.. It is now the third-largest cryptocurrency by market capitalisation, according to CoinMarketCap, making up the bulk of stablecoin volume. Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. 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. As part of that settlement, Tether received a $18.5 million fine, agreed to no longer operate in New York and pledged to provide quarterly reports on its reserves for the next two years. In those two years, bitcoins market cap has gone up eight times, from $159 billion to $1.3 trillion. read more. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information. By signing up, you will receive emails about CoinDesk products and you agree to ourterms & conditionsandprivacy policy. (Reporting by Alun John; Editing by Mark Potter), 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. By signing up, you will receive emails about CoinDesk product updates, events and marketing and you agree to our, Bankman-Fried Should Have Only Flip Phone, Website Whitelist, DOJ Says, With Congress Impotent, Courts Are the Only Option for Fighting SEC Overreach, Silvergate Closes SEN Platform Institutions Used to Move Money to Crypto Exchanges, Binance.US Is Operating 'Unregistered Securities Exchange,' SEC Official Says. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. Thus, it has grown 19-fold in a matter of two dozen months. Got a confidential news tip? Cramer said his crypto concerns right now begin with tether, a stablecoin that's pegged to the U.S. dollar. Stablecoin Tether says holds no Evergrande commercial paper - Yahoo! News and analysis for the professional investor. 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. The most recent report from accountant Moore Cayman shows more than 50% of the assets backing a tether coin were commercial paper and certificates of deposit, rather than dollars, or short-term government paper. 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. But tether's growth of around 3,350% since early 2019 is seen as reason to celebrate. ; ; Vergleich; ; ; ; The value of loans backing Tether's stablecoin reserves could be a risk factor for the crypto industry. Is Evergrande's Fall Influencing the Depeg Issue for Tether? 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 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. Please enter your email address. Reuters described Evergrande as "the biggest issuer of commercial papers". Kryptowhrungsunterricht/E-Book-Download. It was news to us.. 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. Evergrande's main unit had 205.7 billion yuan ($32 billion) worth of commercial paper at the end of 2020, filings show. JPMorgan estimates stablecoin operator would be one of the largest investors in the US market, Tethers commercial paper disclosure places it among global giants, Video: Why every Dogecoin has its day - crypto explained, Russian far-right fighter claims border stunt exposes Putins weakness, Germany seeks to buy Leopard tanks from Switzerland, Germany and Italy stall EU ban on combustion engines, Russia on alert after reconnaissance group crosses over from Ukraine, Ukraine asks EU for 250,000 artillery shells a month, Panic station at Fox News: how the Murdochs agonised over Trumps loss, UK cabbage king turns to plant-based proteins, Saudi owner of Londons most expensive house sued over alleged unpaid private jet bills, UK housing market braced for make-or-break spring, Airlines plan to sue Dutch government over Schiphol airport flight cap, There are no domestic equity investors: why companies are fleeing Londons stock market, Deluge of inflation data pushes US borrowing costs to 2007 levels, Live news updates from March 3: Amazon pauses HQ2 construction, UK regulators launch LME probe, Clutching Warrens letter, Im still positive on stocks, Fears for London market after SoftBanks Arm and building group CRH opt for New York, Joe Biden teaches the EU a lesson or two on big state dirigisme. var plc588602 = window.plc588602 || 0; Learn more about Consensus 2023, CoinDesks longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Given Tethers record to this point, that may take a while. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. 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. According to Bloomberg BW, stablecoin issuer Tether has extended billions of dollars in loans to Chinese companies. Evergrande's main unit had 205.7 billion yuan ($32 billion) worth of commercial paper at the end of 2020, filings show. That type of heavy-handed control is at the core of Chinas conundrum as an authoritarian state trying to reap the rewards of capitalism. First Mover The latest moves in crypto markets, in context. 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. Over the past two years, yet another headwind has entered the China mix. Your weekly wrap of Web3 news and trends. 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. But he did lay out his timeline expectations for regulation. CoinDesk journalists are not allowed to purchase stock outright in DCG. Evergrande has now had to suspend trading of. The most recent attestation states the average credit rating of its commercial paper holdings is "A-1" - an. Yet, does Tether truly own a lot of Chinese commercial paper? He also said that Tether did not hold any commercial paper issued by cryptocurrency exchanges or affiliated entities. The transformation of value in the digital age. var abkw = window.abkw || ''; See here for a complete list of exchanges and delays. So while Evergrande may not be on the books, the concern is that the commercial paper may be from other real estate firms. The stablecoin issuer says its goal is to reduce its commercial paper holdings to zero. The developer on Thursday applied to suspend trading of that units onshore corporate bonds following a downgrade, which market participants said indicated an increasing likelihood of defaults and restructuring. "I know the crypto-lovers never want to hear me say sell, but if you've got a big gain as I did, well, I'm begging you to," the "Mad Money" host said. After a couple of decades of relative freedom for entrepreneurs (including, as mentioned, the apparent freedom to commit securities fraud), Chinese leadership under Xi Jinping has begun to aggressively intervene in markets. Lab leak theory: 3 years on, will we ever know where COVID came from? As demand for tether grew, market participants started to question whether that was the case. The report investigated the quality of assets backing USDT, and alleged the debt assets supporting Tether dollar reserves may of questionable nature.
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