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recently accused of violating securities laws. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities. 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. Its flagship unit, Evergrande Real Estate Group, had 205.7 billion yuan ($32 billion) worth of commercial paper at the end of 2020,. 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. About half of Tethers roughly $75 billion in assets, which back USDT, is in commercial paper. How the biggest companies plan mass lay-offs, The benefits of revealing neurodiversity in the workplace, Tim Peake: I do not see us having a problem getting to Mars, Michelle Yeoh: Finally we are being seen, Our ski trip made me question my life choices, Apocalypse then: lessons from history in tackling climate shocks, Stablecoins: bitcoin for squares has its own downsides. 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 . The Chinese real-estate giant is facing down $300 billion in debt that it cant pay back. 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. News and analysis for the professional investor. "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. "Tether does not hold any commercial paper or other debt or securities issued by Evergrande and has never done so," the company said. Tether has revealed that its commercial paper holdings would be $3.5 billion by July 31. Evergrande, Chinas second-largest property developer by sales, recently warned that it was in danger of defaulting on massive debts. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information. While Tether (the company) said back in September it doesn't hold Evergrande commercial paper, . A Bloomberg report has claimed to have found that Tether holds billions of dollars worth of Chinese commercial paper. 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. The enshittification of apps is real. Thus, it has grown 19-fold in a matter of two dozen months. The downgrade from A to AA applies both to the bonds and their issuer rating. 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. For critics of Tether, the new economy of digital assets is based on the worlds oldest profession: real estate speculation. We do not give personalized investment advice or other financial advice. Ardoino clarified that Tether does not hold Evergrande's commercial paper. 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. 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. analyse how our Sites are used. 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. Learn more about Consensus 2023, CoinDesks longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Cramer stressed he still sees potential for cryptocurrencies to go "mainstream," but believes it's important to lock in at least some gains while they're still there. According to the Financial Times, this makes Tether one of the world's largest investors in the US commercial paper market. The biggest crypto news and ideas of the day. Questions for Cramer? Evergrandes main unit had 205.7 billion yuan ($32 billion) worth of commercial paper at the end of 2020, filings show. var abkw = window.abkw || ''; Since Evergrande's potential collapse could have broad implications for the commercial paper market and Tether's most recent attestation contains no breakdown of either the geographical exposure or investment category of the paper it holds, market participants are concerned about the risks to Tether's books. 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. 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. Tether said that it funnelled roughly half its reserves into commercial paper. 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 . The latest moves in crypto markets, in context. Stablecoin Tether says it does not hold any commercial paper from Evergrande in recent a statement. Disclosures from cryptocurrency provider Tether suggest it has become one of the worlds largest investors in the US commercial paper market, rubbing shoulders with the likes of fund managers Vanguard and BlackRock and dwarfing the investments of tech giants like Google and Apple, according to estimates from JPMorgan. 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. 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. So while Evergrande may not be on the books, the concern is that the commercial paper may be from other real estate firms. To counteract that line of questioning, Tether secured attestations on its financial statements - a review from an independent accountant, rather than a full audit - on the reserves. For Ardoino and the team, this highlights the crypto community's faith in Tether. 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 has vehemently dismissed the claims and has stated it maintains the full value of the reserves backing its stablecoin supply. Neither Tether nor Bitfinex admitted wrongdoing. Many stablecoin companies have followed Tether's lead both with attestation and the use of commercial paper. But this reported accumulation has largely gone unnoticed on Wall Street, according to several of the biggest players in the market including bank traders, analysts and money market funds. Understanding the magnitude of size and growth of USDT, bitcoin and Chinese commercial paper may help give some perspective to the latest headlines. Just two years ago, USDTs market cap was a mere $4 billion. Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. Well send you a myFT Daily Digest email rounding up the latest Cryptocurrencies news every morning. With Tether we are welcoming all that. The vast majority of the commercial paper held by Tether is in A-2 and above rated issuers.. Evergrande's main unit had 205.7 billion yuan ($32 billion) worth of commercial paper at the end of 2020, filings show. Evergrande has now had to suspend trading of that units onshore corporate bonds following a downgrade, another red flag pointing towards an impending default. Mad Money Twitter - Jim Cramer Twitter - Facebook - Instagram, Questions, comments, suggestions for the "Mad Money" website? 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. ; ; Vergleich; ; ; ; 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. All Rights Reserved. The developer on Thursday applied to suspend trading of that unit's. A government bailout is also a possibility. Reuters described Evergrande as "the biggest issuer of commercial papers". This was later repaid by Bitfinex. 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. This license does not include nor permit your resale or commercial use of the Site or its contents. 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. Evergrande is the biggest issuer of commercial paper in the Chinese real estate market, according to Reuters. What should a secular society really look like? Learn more about Consensus 2023, CoinDesks longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. It seems increasingly likely that Evergrande is fated instead for the glue factory. 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. Evergrande has now had to suspend trading of that units onshore corporate bonds following a downgrade, another red flag pointing towards an impending default. All quotes delayed a minimum of 15 minutes. Another 18 per cent is held in fiduciary deposits, more than 12 per cent in secured loans and nearly 10 per cent. Chinese real estate developers are some of the worlds biggest issuers of commercial paper. This license does not include nor permit your resale or commercial use of the Site or its contents. 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. ", 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.