More Articles Evergrande has now had to suspend trading of that unit's onshore corporate bonds following a downgrade, another red flag pointing towards an impending default. A Bloomberg report has claimed to have found that Tether holds billions of dollars worth of Chinese commercial paper. document.write(''); Stablecoin Tether says it does not hold any commercial paper from Evergrande in recent a statement. Tether has become one of the most important components of the cryptocurrency ecosystem, with more than 35bn tethers printed so far this year, more than double its supply in January. Tether, Bitcoin and Chinese Commercial Paper at Scale Webinars Indices Markets Finance Technology Web3 Policy Sponsored Content Upcoming event Yuga Labs, Google and More TV & Videos TV & Videos. personalising content and ads, providing social media features and to Though its main product since its founding in the 1990s has been housing, Evergrande has grown into a huge conglomerate with products ranging from bottled water to electric cars to a soccer team. 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. Tether said that it funnelled roughly half its reserves into commercial paper. Just last month, Bitfinex, Tethers parent company, tried to block CoinDesk from accessing the specifics of its commercial paper holdings by filing a petition in New York Supreme Court. Smart navigation app uses 3D sound to guide blind people. That type of heavy-handed control is at the core of Chinas conundrum as an authoritarian state trying to reap the rewards of capitalism. A stock exchange filing added that Evergrande was added to a watch list for possible further downgrades in the future. "Tether does not hold any commercial paper or other debt or securities issued by Evergrande and has never done so," the company said. This was later repaid by Bitfinex. At the same time, hot topics such as regulation, competition and the Evergrande debt crisis are shining a spotlight on that "old information". Your weekly wrap of Web3 news and trends. However, Tether is very secretive about its holdings, only disclosing that it does hold international commercial paper. A report from the end of 2020 shows that Evergrande has just around 10% of the money owed. Tether grants you a limited license to access and make personal use of the Site. Even the chance to speak to Ardoino is rare. But he did lay out his timeline expectations for regulation. HONGKONG Tether, the worlds 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. Crypto Long &. But these have frequently raised more questions than answers. Tether has vehemently dismissed the claims and has stated it maintains the full value of the reserves backing its stablecoin supply. His role is much broader than tech chief. 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 far-reaching impacts, a managed collapse or a government bailout. As one of the first stablecoins, Tether's experienced its fair share of controversies, particularly surrounding the reserves that back its eponymous coin. Chinese real estate developers are some of the worlds biggest issuers of commercial paper. Hundreds of customers have protested in front of the companys offices alleging mistreatment or fraud. The Node The biggest crypto news and ideas of the day. "The vast majority of the commercial paper held by Tether is in A-2 and above rated issuers. It seems increasingly likely that Evergrande is fated instead for the glue factory. "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. Evergrande has now had to suspend trading of. The information on this website is subject to change without notice. Data is a real-time snapshot *Data is delayed at least 15 minutes. Join our Telegram Group and get trading signals, a free trading course and daily communication with crypto fans! 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. In fact, Tether, has been accused multiple times that their stablecoin is not backed by dollar reserves in the full amount of its market cap of $69 billion. The report revealed that the stablecoin company also provided a billion-dollar loan to Celsius, a centralized crypto lending platform that was recently accused of violating securities laws by the U.S. States of Alabama, Texas, and New Jersey. 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 far-reaching impacts, a managed collapse or a government bailout. 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 . Stablecoins are rarely on the tips of investors' tongues when it comes to talking about the volatility-filled headline-grabbing crypto market. By signing up, you will receive emails about CoinDesk products and you agree to ourterms & conditionsandprivacy policy. The developer on Thursday applied to suspend trading of that unit's. 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. That has included harshly curtailing apparently successful fintech firms like Ant Group and, most recently, instituting restrictions on video games, which cant be good for Tencent and other firms. Markets cant function without transparent information flows, full stop. "Tether does not hold any commercial paper or other debt or securities issued by Evergrande and has never done so," the company said. 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? News and analysis for the professional investor. It goes something like this: About half of all bitcoin trades against stablecoin tether (USDT), according to data from CryptoCompare. Tether has faced scrutiny from authorities and investigators in the past. Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. Evergrande's main unit had 205.7 billion yuan ($32 billion) worth of commercial paper at the end of 2020, filings show. 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 . Meanwhile, based on data from the Peoples Bank of China, Chinese commercial paper ended Q2 in 2021 at around $900 billion, up from just shy of $700 billion that same quarter in 2019, a gain of less than a third. All quotes delayed a minimum of 15 minutes. Get the latest business insights from Dun & Bradstreet. 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. Your Use of the Site. Head to consensus.coindesk.com to register and buy your pass now. At the end of 2020, it had $32 billion worth of commercial paper. Evergrande is a major property developer in China, and beyond real estate, it has multiple other business units operating in industries such as health-care services and electric vehicles. What financial advisors need to know about crypto. 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. "The vast majority of the commercial paper held by Tether is in A-2 and above rated issuers.". Or perhaps there are other ways to explain things. He said that the New York attorney-general had no clear findings that customers at any point were at risk of being unable to redeem tethers because of a lack of backing. 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. A week after its stablecoin briefly lost its 1:1 peg with the U.S. Dollar, Tether's Q1 2022 assurance report shows it has reduced the commercial paper in its USDT reserves by 16.8%.. As of March 31, Tether 's $82 billion reserves were 86% cash and cash equivalents, the rest includes $4 billion in corporate bonds, $3 billion secured loans, and $5 billion other investments like cryptocurrencies . The latest moves in crypto markets, in context. Lawrence Lewitinn is CoinDesk's managing editor of global capital markets. A Division of NBCUniversal. About half of Tethers roughly $75 billion in assets, which back USDT, is in commercial paper. According to the attorney-generals investigation, there were instances when Tether was not fully backed in the past. BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back. 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. But the firm has not clarified the exact details of its debtors. var plc588602 = window.plc588602 || 0; Evergrande is trying to find a way to cut costs and sell off some of its assets to dig its way out. Evergrande has now had to suspend trading of that units onshore corporate bonds following a downgrade, another red flag pointing towards an impending default. Your weekly wrap of Web3 news and trends. The downgrade notice was sent to Evergrande on Sept. 15 from China Chengxin International. Kryptowhrungsunterricht/E-Book-Download. These frauds even show some sign of being tacitly approved by the Chinese government, to the extent that they have targeted investors abroad. Tether has been beset by transparency concerns in the past as well. Tether is completely unbacked USD that gives these exchanges the liquidity they need to market make derivatives that have non-linear . In the NYAG investigation, the company was found to be conducting illegal activities in New York. recently accused of violating securities laws. 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. Approximately half of Tethers $62.8 billion assets as of the end of June 2021, were backed by commercial paper and certificates of deposit, according to the company. Which countries in the EU are buying the most electric cars? You will receive a link to create a new password via email. Cramer urges investors to take some crypto profits, citing Evergrande-related risks, struggling Chinese property developer Evergrande, stablecoin that's pegged to the U.S. dollar, third-largest cryptocurrency by market value. The downgrade from A to AA applies both to the bonds and their issuer rating. Evergrande, Chinas second-largest property developer by sales, recently warned that it was in danger of defaulting on massive debts. Evergrande's main unit had 205.7 billion yuan ($32 billion) worth of commercial paper at the end of 2020, filings show. However, as Tethers reserve holdings have been questioned by regulators such as the New York attorney-general in the past, providing banking services to Tether will likely raise reputational risk concerns, wrote the JPMorgan analysts. 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 Evergrande's main unit had 205.7 billion yuan ($32 billion) worth of commercial paper at the end of 2020, filings show. Learn more about Consensus 2023, CoinDesks longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. According to the Financial Times, this makes Tether one of the world's largest investors in the US commercial paper market. 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 far-reaching impacts, a managed collapse or a government bailout. JPMorgans analysts said the large commercial paper holdings may suggest that Tether is struggling to find a bank willing to take its cash as a deposit. 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. 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. Got a confidential news tip? The US Treasury is expected to release an in-depth report on stablecoins any day now. Given Tethers record to this point, that may take a while. A wave of smaller stock frauds from 2010-2016 were chronicled in the documentary The China Hustle, and Luckin Coffee put an exclamation point on the trend in 2019. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers. But these are the same rating agencies that are rating the US Treasuries," Ardoino said. "In the end, this industry is more than $2 trillion and it's important to have clear guidelines and clear rules and so on. The tumble appears to have been triggered by the mounting problems at embattled property giant China. About half of Tether's roughly $75 billion in assets, which back USDT, is in commercial paper. Consider this - most of the reserve assets Tether holds to support its USDT are commercial papers (CPs) and certificate of deposits (CDs) instead of the US dollar. 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. 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. However that's not stopped its popularity. Who to fire? Another 18 per cent is held in fiduciary deposits, more than 12 per cent in secured loans and nearly 10 per cent. 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 . As demand for tether grew, market participants started to question whether that was the case. No, I think this theory is baloney. 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. The downgrade notice was sent to Evergrande on Sept. 15 from China Chengxin International. Tether grants you a limited license to access and make personal use of the Site. Probing the intersection of crypto and government. The stablecoin issuer says its goal is to reduce its commercial paper holdings to zero. 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". He is also now CTO of cryptocurrency exchange Bitfinex. In total, Tether holds 52% US Treasury bonds, 37% commercial paper, with the remainder in cash and money market funds. And despite it seeming as though the stablecoins are in competition, Ardoino believes this will be key to success with regulators. Elon Musks Twitter is dying a slow and tedious death. "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. 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. Krypto. A stock exchange filing added that Evergrande was added to a watch list for possible further downgrades in the future. 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. Critics say it's not enough. Evergrande, Chinas second-largest property developer by sales, recently warned that it was in danger of defaulting on massive debts. Tether is the third-largest cryptocurrency by market value, trailing only ether and bitcoin, which are second and first, respectively. 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 .
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