By Harry B - Crypto Specialist - 20-07-2021
Regulatory authorities have been overly pressurising the well-known stablecoin investment, Tether (USDT). The investigatory bodies are moving their focus to the commercial paper reserve. Regulators have been keeping busy with trying to determine what constitutes the Tether reserves.
Janet Yellen, the US Treasury Secretary, leads the team of regulators with the latest stablecoin assignment. Reportedly, Yellen had been known to talk about the potential risks of investing in stablecoins. The "President's Working Group on Financial Market" is currently investigating whether Tether (USDT) truly has as many commercial papers as it says. Commercial papers are debt securities issued by firms to investors in exchange for short-term funding.
The Working Group, on the other hand, does not accept the promises, comparing it to a mutual fund that can lose all of its investment value in a single day. The total stock of Tether that is currently in circulation is at about $62 billion. As a result, there appears to be reasonable grounds for some to be concerned.
Tether published the makeup of its overall reserves two months ago. The stablecoin contained more securities other than cash or currency equivalents, such as bonds, secured loans, Bitcoin (BTC), and a more significant amount of commercial documents. On another note, current reports show that bullish crypto market investment, Bitcoin, soars above $40k.
However, on July 19, Yellen was heard requesting lawmakers to create rules that will govern the use of stablecoins in the financial sector. After pushing for rules on stablecoins, Yellen received a letter from Senator Elizabeth Warren just over a week later, requesting her to advocate for further regulation of the cryptocurrency trading industry as a whole.