Smart navigation app uses 3D sound to guide blind people. Even the chance to speak to Ardoino is rare. Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks. 2023 CNBC LLC. As one of the first stablecoins, Tether's experienced its fair share of controversies, particularly surrounding the reserves that back its eponymous coin. Which countries have banned TikTok, and why? Debate swirls about whether that impact would spread beyond China, but theres broad agreement that impact within the country would be near catastrophic. Evergrande, China's second-largest property developer, is to blame. Tether's USDT remains the dominant stablecoin in the market despite the FUD surrounding the coin. 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. "In the end, this industry is more than $2 trillion and it's important to have clear guidelines and clear rules and so on. 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 are always working with regulators and we are expecting additional or proper regulations coming in the next few months, to one year," Ardoino said. His role is much broader than tech chief. For critics of Tether, the new economy of digital assets is based on the worlds oldest profession: real estate speculation. Evergrande has failed to execute on the promises backing its roughly $300 billion in debt, particularly in housing. Evergrande's main unit had 205.7 billion yuan ($32 billion) worth of commercial paper at the end of 2020, filings show. 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 still expects to be the first to secure an external financial statement audit, which it has been exploring since 2017, but it won't necessarily be from one of the Big Four accountants. Lawrence Lewitinn is CoinDesk's managing editor of global capital markets. The latest moves in crypto markets, in context. Lab leak theory: 3 years on, will we ever know where COVID came from? "The only interest of Tether is maintaining a liquid and extremely safe portfolio," he said. But these are the same rating agencies that are rating the US Treasuries," Ardoino said. We do not give personalized investment advice or other financial advice. var absrc = 'https://servedbyadbutler.com/adserve/;ID=177750;size=0x0;setID=588602;type=js;sw='+screen.width+';sh='+screen.height+';spr='+window.devicePixelRatio+';kw='+abkw+';pid='+pid588602+';place='+(plc588602++)+';rnd='+rnd+';click=CLICK_MACRO_PLACEHOLDER'; 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. Hoegner said the commercial paper reserves included amounts held internationally with further sub-custody at major global institutions. "There is an entire world outside of the US," Ardoino said. Sign up for free newsletters and get more CNBC delivered to your inbox. Holiday events will take place, but it is silently frowned upon to join in. Probing the intersection of crypto and government. "We are working with an amazing counterparty that is extremely professional and has a deep knowledge of traditional finance and also crypto markets and the blockchain industry 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. But he did lay out his timeline expectations for regulation. But Stuart Hoegner, Tethers general counsel, said: With respect to reputation, we believe we are seeing the opposite: more and more counterparties are comfortable with Tether and our transparency initiatives and are keen to work with us.. 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. Learn more about Consensus 2023, CoinDesks longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. But tether's growth of around 3,350% since early 2019 is seen as reason to celebrate. That type of heavy-handed control is at the core of Chinas conundrum as an authoritarian state trying to reap the rewards of capitalism. Evergrande is trying to find a way to cut costs and sell off some of its assets to dig its way out. It goes something like this: About half of all bitcoin trades against stablecoin tether (USDT), according to data from CryptoCompare. Tether had stated since its launch in 2014 that its tokens were fully backed by US dollars in bank accounts, before pivoting in February 2019 to say that its reserves included traditional currency, cash equivalents and other assets and receivables. 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 developer on Thursday applied to suspend trading of that unit's. Tether reserves the right to change these Terms at any time without notice, and such changed Terms will take effect once we post them at the Site. clarified that Tether does not hold Evergrande's commercial paper. "So if you own crypto in any form and you've got big gains, I recommend taking something off the table.". Tether has been beset by transparency concerns in the past as well. The biggest crypto news and ideas of the day. This stability means they offer an accessible - if boring - entry and exit point to the crypto world. 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. The Node The biggest crypto news and ideas of the day. 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. In those two years, bitcoins market cap has gone up eight times, from $159 billion to $1.3 trillion. 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. Given Tethers record to this point, that may take a while. "The vast majority of the commercial paper held by Tether is in A-2 and above rated issuers. In a series of tweets about the Evergrande news, partner at Cinnemhian Ventures Adam Cochran, said that IF either Tether or USDC did meltdown in a global collapse though, itd actually be bullish for crypto, as if you couldnt use them to cash out, people would just start bulk converting them into BTC/ETH regardless of price., Cochran added that, despite not being a well-known name in the West, the failure of Evergrande could have massive fallout. 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. Many stablecoin companies have followed Tether's lead both with attestation and the use of commercial paper. Tether grants you a limited license to access and make personal use of the Site. By signing up, you will receive emails about CoinDesk products and you agree to ourterms & conditionsandprivacy policy. Evergrande is trying to find a way to cut costs and sell off some of its assets to dig its way out. 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. At the same time, hot topics such as regulation, competition and the Evergrande debt crisis are shining a spotlight on that "old information". All quotes delayed a minimum of 15 minutes. Tether has vehemently dismissed the claims and has stated it maintains the full value of the reserves backing its stablecoin supply. 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. While Tether (the company) said back in September it doesn't hold Evergrande commercial paper, . It expanded by borrowing aggressively, including during periods when Chinas economic outlook was seen in much rosier terms globally than it is now. News and analysis for the professional investor. That marks a significant decrease in commercial paper, from $24 billion to $20 billion in the first quarter of 2022. And despite it seeming as though the stablecoins are in competition, Ardoino believes this will be key to success with regulators. How Ethereum's evolution impacts crypto markets. The struggling real estate giant has listed $300 billion in total liabilities and says it needs to find funds quickly. Evergrande is the biggest issuer of commercial papers. Evergrande has now had to suspend trading of. 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. What financial advisors need to know about crypto. Another 18 per cent is held in fiduciary deposits, more than 12 per cent in secured loans and nearly 10 per cent. In fact, Tether claimed earlier in the year that 50% of its reserves come from commercial paper. As we have indicated in our published statements and in 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 . "The vast majority of the commercial paper held by Tether is . 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. CNBC's Jim Cramer urged investors who have gains in their cryptocurrency portfolios to take some profits, saying Monday he believes digital currencies are likely to face more weakness related to struggling Chinese property developer Evergrande. Tethers previous public attestations include various short-term deposits and commercial paper kept as reserves to back the USDT stablecoin. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information. Its been going on for a long time one analyst who warned about Evergrandes practices as early as 2012 was temporarily banned from Hong Kong markets by regulators for his reckless claims. Among other signs of serious mismanagement, customers have made large deposits on Evergrande apartments that were never built. document.write(''); Stablecoin Tether says it does not hold any commercial paper from Evergrande in recent a statement. The developer on Thursday applied to suspend trading of that unit's. "Don't let it become a loss. You will receive a link to create a new password via email. He also said that Tether did not hold any commercial paper issued by cryptocurrency exchanges or affiliated entities. 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. Tether said that it funnelled roughly half its reserves into commercial paper. According to a spokesperson from Tether, Tether does not hold any commercial paper or other debt or securities issued by Evergrande and has never done so. Tether is the third-largest cryptocurrency by market value, trailing only ether and bitcoin, which are second and first, respectively. The information on this website is subject to change without notice. But since it's unsecured, there is also very little recourse for investors if an issuer does default. Probing the intersection of crypto and government. Stablecoin Tether says it does not hold any commercial paper from Evergrande in recent a statement. different direction, choosing to only use cash reserves and cash equivalents, US Treasury is expected to release an in-depth report on stablecoins. personalising content and ads, providing social media features and to Evergrandes main unit had 205.7 billion yuan ($32 billion) worth of commercial paper at the end of 2020, filings show. 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. Your weekly wrap of Web3 news and trends. Or perhaps there are other ways to explain things. It earned this title after the Chinese government banned the company from issuing longer-term debt. Head to consensus.coindesk.com to register and buy your pass now. "I think that it's a little bit aggressive, or cocky, to ask that everyone in the world use US agencies, or US auditing companies - otherwise it does not matter, or is not fine," he said. 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 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. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. The enshittification of apps is real. Kryptowhrungsunterricht/E-Book-Download. This license does not include nor permit your resale or commercial use of the Site or its contents. Be a smarter, safer investor in eight weeks. What does one have to do with the other? 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. Tether reserves the right to change these Terms at any time without notice, and such changed Terms will take effect once we post them at the Site. For Ardoino and the team, this highlights the crypto community's faith in Tether. Tether does not hold any commercial paper or other debt or securities issued by Evergrande and has never done so, the company said. The industry leader for online information for tax, accounting and finance professionals. The. 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. 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. madcap@cnbc.com. 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. Stanley will arrange a new seating arrangement sporadically. Evergrande is just the latest major Chinese firm to have serious problems due to apparent fraud or mismanagement. "So Tether is extremely glad that there is a USDC, that there is Paxos and all the other stablecoins, because that is how we become an industry.". We use This is not the first time concerns about the true value of USDT have emerged. Tether grants you a limited license to access and make personal use of the Site. Concerns intensified after Evergrande admitted in June it did not pay some commercial paper on time, and news in July a Chinese court froze a $20 million bank deposit held by the firm on the . Hundreds of customers have protested in front of the companys offices alleging mistreatment or fraud. "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. CoinDesk journalists are not allowed to purchase stock outright in DCG. Investors aren't only looking at audits, there's also regulation. 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. A Division of NBCUniversal. There is a chance that were currently staring down the barrel of the next financial meltdown.. Reuters described Evergrande as "the biggest issuer of commercial papers". That should refute anyone who could try to argue USDT may have fueled Chinas boom in commercial paper. Tethers are today, and have always been, fully backed by assets sufficient to cover the amount of tethers in circulation, Hoegner said of its latest disclosure. "Tether does not hold any commercial paper or other debt or securities issued by Evergrande and has never done so," the company said. Sign up for notifications from Insider! Questions for Cramer? 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. ", 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.
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