Tether Portfolio: 200 Million Dollars

Crypto News– According to a recent report by The Wall Street Journal (WSJ), Tether Holdings, the issuer of the USDT stablecoin, has resumed its practice of lending its digital assets to customers. This decision comes less than a year after Tether announced its intention to discontinue this lending practice.

Tether Portfolio: 200 Million Dollars

The report states that a spokesperson for Tether has confirmed the issuance of new loans. Furthermore, Tether’s latest quarterly financial update, as of June 30, revealed that its assets now include $5.5 billion in loans, which is a significant increase from the $5.3 billion reported in the previous quarter.

The WSJ report also notes that Tether has labeled these loans as “secured loans,” although it has provided limited information about the borrowers and the accepted collateral. The decision by Tether to resume lending has raised concerns within the cryptocurrency community due to the potential risks involved.

The report highlights that while most of the company’s reported assets consist of low-risk instruments such as Treasury bills, loans present a different risk profile. According to WSJ, Tether Holdings cannot guarantee the repayment of these loans, the ability to convert loans into cash if necessary, or the adequacy of the held collateral.

In response, Alex Welch, a spokesperson for Tether Holdings, explained that the decision to restart lending was driven by short-term loan requests from longstanding clients in the second quarter of 2023. Welch also reiterated the company’s commitment to phase out loans completely by 2024. She emphasized Tether’s goal of protecting its customers from significant liquidity depletion and potential losses resulting from the sale of collateral at unfavorable prices.