Tether has been facing a lot of pressure from regulatory authorities. Now, the attention of the watchdogs has shifted to its commercial paper reserve. As a result, this week has been very hot for the company. The regulators focus their attention on what makes up the Tether reserves.
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A report disclosed that Tether’s Michael Hsu said that the US regulators focus their attention on the paper to know if every Tether Token is actually backed by $1 as the company claims.
US Regulators Scrutinize Tether
From what we learned, the regulators investigating Tether are led by Janet Yellen, the US Treasury Secretary. Before now, Yellen has held some meetings about the possible risks of stablecoins.
Now, the ” President’s Working Group on Financial Market” aims to know if Tether really holds large amounts of commercial papers as it claims. Commercial papers usually represent debt instruments that companies issue to investors for short-term funds.
However, the Working Group does not believe the claims as it compares it to a mutual fund that can lose its investors in one day. Presently, the total USDT in circulation is 62 billion. So, there seems to be a legitimate cause for alarm.
