Stablecoin issuer Tether said it reduced its commercial paper holdings in the first quarter of this year to improve the quality of its reserves.
Tether reported today that it had reduced its commercial paper to $19.9 billion from $24.2 billion the previous quarter, a 17% decrease. It also added U.S. Treasury bills, increasing them to $39.2 billion from $34.5 billion.
The company added that it planned to cut its commercial paper by another 20%, which would be reflected in its second-quarter report.
Bloomberg said last October said that much of Tether’s commercial paper had been issued by big Chinese companies, causing some analysts to question the quality of the reserves. Tether has refrained from disclosing the names of those firms.
Tether is the provider of USD Tether (USDT), the biggest stablecoin in the crypto market. It maintains the value of its centralized stablecoin by using a basket of assets, including corporate debt, US Treasury bills and some cash reserves.
A quarterly attestation report showed that Tether had about $82 billion of reserves on March 31 last year, of which cash reserves and bank deposits accounted for $4 billion. Its current market cap is about $74 billion, according to CoinGecko.
The company had some difficulty dealing with investor fears over the recent TerraUST collapse. During the last week, USDT’s market cap dropped by about $9 billion amid a spike in redemptions of USDT for dollars. Still, on May 12 the company said in a post that it would honor all redemptions as proof of its solvency.