Tether announced in a tweet that it would hold consultations with some of the most important consulting firms in the coming days. Someone clearly speculated immediately that the recent market crashes and the collapse of Terra’s stablecoin may have also put Tether in trouble and that it is attempting to make amends.
In contrast, the stablecoin experienced record withdrawals of its currency totaling $10 billion in just one week, accounting for approximately 12% of Tether’s total circulation. This is one of the largest money withdrawals in history, possibly second only to the $16 billion withdrawal suffered by Washington Mutual Bank, which led to its bankruptcy in 2008.
Ardoino, in an interview with Euro money magazine said:
“We were put a stress test that not even bank can succeed, and we passed with flying colours”.
According to the CTO, the stablecoin is being speculated on by bearish speculators, who appear to have been repelled for the time being.
He went on:
“We showed that in the worst-case scenario – when there was Terra crumbling, the entire crypto market crumbling, and the stock market was going down – we got a tonne of requests of withdrawals, and we honoured them within minutes”.
Tether’s cash reserves are under scrutiny
The size of Tether’s cash reserves is the issue that continues to raise clouds over the world’s most important stablecoin by capitalization after Bitcoin and Ethereum. This is said to be the focus of the next audits.
Ardoino, who has been trying for some time to reassure investors about the company’s reserves, stated that Tether has reduced its holdings of commercial paper, the majority of which is highly rated, from $40 billion to $15 billion over the last eight months. Furthermore, there has been a greater reserve shift toward securities with maturities ranging from zero to three months.
According to some, these audits also serve to broaden the list of banks with which Tether works, who are reportedly concerned about rumors and regulatory investigations into the company, which is frequently accused of providing inaccurate or incomplete financial information.
The manager continued:
“We wish that regulators would provide clarity on what is owed to be disclosed. If we disclose a [hypothetical] 10, it’s unfair that other stablecoins disclose a five”.