Tether has been facing tremendous pressure from regulators. Now, the attention of regulators has shifted to its commercial paper reserves. Therefore, this week is very hot for the company. Regulators have focused their attention on the composition of Tether’s reserves.
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A report Disclosure Michael Hsu of Tether stated that US regulators are focusing their attention on the document to understand whether each Tether token is really backed by $1 as the company claims.
U.S. regulators review Tether
As far as we know, the regulatory agency investigating Tether is led by the US Treasury Secretary Janet Yellen (Janet Yellen). Prior to this, Yellen had held some meetings on the possible risks of stablecoins.
Now, the “Presidential Financial Markets Working Group” aims to understand whether Tether really holds a large amount of commercial paper as it claims. Commercial paper usually represents a debt instrument issued by a company to investors for short-term funds.
However, the working group did not believe these claims because it compared them to mutual funds that could lose investors in a day. At present, the total amount of USDT in circulation is 62 billion. Therefore, there seems to be a legitimate reason to cause panic.
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In the past two months, Tether disclosed the composition of its total reserves. According to stablecoins, it has more tools than just cash or cash equivalents, such as bonds, secured loans, Bitcoin, and a larger proportion of commercial paper.
Related Reading | Tether conducts an audit to deny claims about transparency
In conversations with sources, Tether’s general counsel Stuart Hoegner revealed that the company plans to conduct a thorough audit in the next few months. Let us recall that Tether has not conducted such an audit before, and this news made many investors breathe a sigh of relief.
However, on July 19, someone heard Yellen asking lawmakers to formulate rules to guide stablecoins in the financial market.
More calls for encryption regulations
After calling for the regulation of stablecoins, Yellen received a letter from Senator Elizabeth Warren 9 days later, asking her to promote stricter regulation of the entire cryptocurrency industry.
During the hearing of the “Senate Banking Committee”, Warren also expressed her negative stance on the crypto industry. In her view, instead of handing over the financial system to the giant banks, it is better to hand it over to some anonymous, unnamed, shady miners and super programmers.
However, at the hearing, Anderson killed legal partner Preston Byrne, said that the most terrifying thing is that Elizabeth Warren controls the financial system. Elizabeth is a Democrat and has served as a U.S. Senator since 2013.
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