Decentral Media, Inc. is not an investment advisor. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers. By signing up, you will receive emails about CoinDesk product updates, events and marketing and you agree to our, Bankman-Fried Should Have Only Flip Phone, Website Whitelist, DOJ Says, With Congress Impotent, Courts Are the Only Option for Fighting SEC Overreach, Silvergate Closes SEN Platform Institutions Used to Move Money to Crypto Exchanges, Binance.US Is Operating 'Unregistered Securities Exchange,' SEC Official Says, About half of Tethers roughly $75 billion in assets, Tether (the company) said back in September. The most recent attestation states the average credit rating of its commercial paper holdings is "A-1" - an. David Z. Morris is CoinDesk's Chief Insights Columnist. 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. 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. Now, the second-largest stablecoin, circle (USDC), is heading in a different direction, choosing to only use cash reserves and cash equivalents. Stay up to date with what you want to know. Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. There is a chance that were currently staring down the barrel of the next financial meltdown.. Our Standards: The Thomson Reuters Trust Principles. The latest moves in crypto markets, in context. But the relatively staid coins are making up a growing proportion of the overall market, with a value of around $127 billion. However, Tether is very secretive about its holdings, only disclosing that it does hold international commercial paper. 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. This article is excerpted from The Node, CoinDesks daily roundup of the most pivotal stories in blockchain and crypto news. The company has more than $300 billion in total liabilities and recently warned investors it may default on its debts. According to the Financial Times, this makes Tether one of the world's largest investors in the US commercial paper market. Tethers claims that its virtual currency was fully backed by US dollars at all times was a lie, said attorney-general Letitia James in February. Even the chance to speak to Ardoino is rare. 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 struggling real estate giant has listed $300 billion in total liabilities and says it needs to find funds quickly. 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. Well send you a myFT Daily Digest email rounding up the latest Cryptocurrencies news every morning. Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks. 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. By signing up, you will receive emails about CoinDesk products and you agree to ourterms & conditionsandprivacy policy. HONG KONG (Reuters) - 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. Head to consensus.coindesk.com to register and buy your pass now. Before falling into a major crisis, Chinese property developers had issued commercial paper worth 3.6 trillion yuan ($556 billion) in 202020% higher from 2019. Among other signs of serious mismanagement, customers have made large deposits on Evergrande apartments that were never built. Ardoino joined Tether back in late 2015 as a developer before being appointed chief technology officer around a year later. Evergrande is trying to find a way to cut costs and sell off some of its assets to dig its way out. The struggling real estate giant has listed $300 billion in total liabilities and says it needs to find funds quickly. Tethers previous public attestations include various short-term deposits and commercial paper kept as reserves to back the USDT stablecoin. We use In those two years, bitcoins market cap has gone up eight times, from $159 billion to $1.3 trillion. The stablecoin issuer Tether this week declared that it doesnt hold short-term debt issued by troubled Chinese real estate developer Evergrande. Evergrande's main unit had 205.7 billion yuan ($32 billion) worth of commercial paper at the end of 2020, filings show. 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. Editing by Mark Potter, How China's new No.2 hastened the end of Xi's zero-COVID policy, Silvergate suspends crypto payments network; shares fall after-hours, Bank of Canada to hold rates steady at 4.50% through this year, Analysis: Sharp drop in equity premium may mark return of 60/40 portfolio, As space junk threat grows, government and investors seek solutions, Brazil's Petrobras faces legal risks after halting asset sales -lawyers, Nissan and Mexican workers agree to 9% raise at Morelos plant, union says, EIA blames crude oil blending, under-reported output for high adjustments in US data, American Airlines, flight attendants union seek mediation in contract negotiations, Exclusive news, data and analytics for financial market professionals. The downgrade notice was sent to Evergrande on Sept. 15 from China Chengxin International. "Tether said they have no Evergrande exposure," Cramer acknowledged. It was news to us.. This is not the first time concerns about the true value of USDT have emerged. "But tons of Chinese businesses stand to get crushed by this fiasco, and they have Evergrande exposure, and that could spell real trouble if the dominoes fall here.". Just two years ago, USDTs market cap was a mere $4 billion. Stablecoin Tether says it does not hold any commercial paper from Evergrande in recent a statement. Cramer said his crypto concerns right now begin with tether, a stablecoin that's pegged to the U.S. dollar. 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. Tether operates a so-called stablecoin, which it says is backed one-for-one by dollar assets. Evergrande's main unit had 205.7 billion yuan ($32 billion) worth of commercial paper at the end of 2020, filings show. Tether has amply demonstrated, most recently through assurance opinions from [auditor] Moore Cayman, that all issued tethers are, in fact, fully reserved, he added. About half of Tether's roughly $75 billion in assets, which back USDT, is in commercial paper. He holds Bitcoin, Ethereum, and small amounts of other crypto assets. See here for a complete list of exchanges and delays. 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. I think one time, Stanley mentioned when he saw employees on downtime he . As demand for tether grew, market participants started to question whether that was the case. Who to fire? We may, but are not obligated to, update any outdated, incomplete, or inaccurate information. The developer on Thursday applied to suspend trading of that unit's. This stability means they offer an accessible - if boring - entry and exit point to the crypto world. 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. 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 outlet estimated that the actual figure could be even higher, since it has other units, which also issue commercial paper. Tether's market capitalization surged 357% in the last year to around $69 billion. In a blog post a few days after its reserves report was released, Hoegner said the commercial paper that the company held was purchased through recognised issuance programmes, the vast majority highly rated, and that there were limits on individual issuers and regional exposures. But he did lay out his timeline expectations for regulation. The US Treasury is expected to release an in-depth report on stablecoins any day now. The information on this website is subject to change without notice. Mad Money Twitter - Jim Cramer Twitter - Facebook - Instagram, Questions, comments, suggestions for the "Mad Money" website? He also said that Tether did not hold any commercial paper issued by cryptocurrency exchanges or affiliated entities. However, Tether is very secretive about its holdings, only disclosing that it does hold international commercial paper. (Reporting by Alun John; Editing by Mark Potter), Ukraine Latest: Russia Continues Efforts to Encircle Bakhmut, INSIGHT-Before fatal collapse, Turkish building had skirted code thanks to Erdogan policy, In Chicago, adapting electric buses to winters challenges, Ukraine ally Kallas fights for reelection in Estonia vote, Global race to boost electric vehicle range in cold weather. 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. That type of heavy-handed control is at the core of Chinas conundrum as an authoritarian state trying to reap the rewards of capitalism. 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. That type of heavy-handed control is at the core of Chinas conundrum as an authoritarian state trying to reap the rewards of capitalism. Sign up for The Node, our daily newsletter bringing you the biggest crypto news and ideas. 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. CNBC's Jim Cramer said Monday investors should take profits in their crypto holdings. He is also now CTO of cryptocurrency exchange Bitfinex. 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. Get this delivered to your inbox, and more info about our products and services. Hit him up! Evergrande is trying to find a way to cut costs and sell off some of its assets to dig its way out. About half of Tethers roughly $75 billion in assets, which back USDT, is in commercial paper. "So if A1 commercial paper rated by a US Agency is considered safe [then] why is where the issuer located matters?". So while Evergrande may not be on the books, the concern is that the commercial paper may be from other real estate firms. News and analysis for the professional investor. No, I think this theory is baloney. Evergrande has now had to suspend trading of. 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. 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. 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. Tether said that it funnelled roughly half its reserves into commercial paper. According to documents received byBloomberg BusinessWeek, Tether has extended billions of dollars in loans to large Chinese companies. Understanding the magnitude of size and growth of USDT, bitcoin and Chinese commercial paper may help give some perspective to the latest headlines. Your Use of the Site. See here for a complete list of exchanges and delays. For Ardoino and the team, this highlights the crypto community's faith in Tether. 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. 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. Overall, the studio has a watchful eye. Be a smarter, safer investor in eight weeks. 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. 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. personalising content and ads, providing social media features and to Debate swirls about whether that impact would spread beyond China, but theres broad agreement that impact within the country would be near catastrophic. Sign up for notifications from Insider! 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. Got a confidential news tip? Crypto markets took a dip Thursday just around the time it was reported that Chinas Evergrande Group was on the verge of defaulting on a bond payment. The biggest crypto news and ideas of the day. 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. You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. This license does not include nor permit your resale or commercial use of the Site or its contents. It expanded by borrowing aggressively, including during periods when Chinas economic outlook was seen in much rosier terms globally than it is now. Evergrande, for its part, is the largest commercial paper issuer in China's real estate market, owning some $32 billion worth of commercial paper at the end of last year. It is also alleged that Tether also owns commercial paper issued by Evergrande, China's second-largest real estate developer, which is itself experiencing a major liquidity crisis. A stock exchange filing added that Evergrande was added to a watch list for possible further downgrades in the future. This story was seen first on BeInCrypto Join our Telegram Group and get trading signals, a free trading course and more stories like this on BeInCrypto, Ukraine Latest: Russia Continues Efforts to Encircle Bakhmut, INSIGHT-Before fatal collapse, Turkish building had skirted code thanks to Erdogan policy, In Chicago, adapting electric buses to winters challenges, Ukraine ally Kallas fights for reelection in Estonia vote, Global race to boost electric vehicle range in cold weather. madcap@cnbc.com. 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. Tether published its first Reserves Breakdown in March 2021. You will receive a link to create a new password via email. While Tether (the company) said back in September it doesn't hold Evergrande commercial paper, . The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. We use cookies to improve your experience. However that's not stopped its popularity. 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. 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. Cramer has a position in ether, which runs on the Ethereum blockchain. The downgrade notice was sent to Evergrande on Sept. 15 from China Chengxin International. The transformation of value in the digital age. What does one have to do with the other? "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.". ; ; Vergleich; ; ; ; Such holdings of companies short-term debt would make it the seventh largest in the world. 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. "Tether does not hold any commercial paper or other debt or securities issued by Evergrande and has never done so," the company said. In early 2021, Tether paid a fine of $18.5 million to settle a case with the New York Attorney General. While Tether (the company) said back in September it doesnt hold Evergrande commercial paper, about a month ago Bloomberg BusinessWeek reported Tethers holdings included billions of dollars of short-term loans to large Chinese companies something money-market funds avoid.. Evergrande's main unit had 205.7 billion yuan ($32 billion) worth of commercial paper at the end of 2020, filings show. In an interview, stablecoin Tether's tech chief Paolo Ardoino lays out the case for holding commercial paper in its reserves. "The case is you have two choices, you trust the rating agencies, or you don't trust them. The "Mad Money" host said the struggles of Chinese developer Evergrande are likely to keep weighing on crypto markets. Over the past two years, yet another headwind has entered the China mix. "Right now, owning crypto is what's known as a 'crowded' trade and I don't want you to lose money if this space keeps getting hit by Evergrande's contagion worries," he said. Krypto. This was later repaid by Bitfinex. "Don't let it become a loss. document.write(''); Stablecoin Tether says it does not hold any commercial paper from Evergrande in recent a statement. CoinDesk journalists are not allowed to purchase stock outright in DCG. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. Tether, the largest stablecoin, is a Hong-Kong based stable currency. Tether is completely unbacked USD that gives these exchanges the liquidity they need to market make derivatives that have non-linear . 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. Tether does not hold any commercial paper or other debt or securities issued by Evergrande and has never done so, the company said. 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'; By signing up, you will receive emails about CoinDesk products and you agree to ourterms & conditionsandprivacy policy. "So if you own crypto in any form and you've got big gains, I recommend taking something off the table.". A government bailout is also a possibility. Which countries have banned TikTok, and why? Stablecoin Tether clarified that while they do hold commercial paper, none of it is from Evergrande. Stanley will arrange a new seating arrangement sporadically. At the end of 2020, it had $32 billion worth of commercial paper. "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. In the NYAG investigation, the company was found to be conducting illegal activities in New York. Join the most important conversation in crypto and Web3 taking place in Austin, Texas, April 26-28. Additionally, it is China's largest issuer of commercial paper with more than $300 billion in debt, according to reports. Chinese real estate developers are some of the world's biggest issuers of commercial paper. Probing the intersection of crypto and government. Reuters described Evergrande as "the biggest issuer of commercial papers". 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