Cramer has a position in ether, which runs on the Ethereum blockchain. Chinese real estate developers are some of the world's biggest issuers of commercial paper. But he did lay out his timeline expectations for regulation. 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. 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. 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Stablecoin Tether clarified that while they do hold commercial paper, none of it is from Evergrande. 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. It seems increasingly likely that Evergrande is fated instead for the glue factory. But these have frequently raised more questions than answers. This type of debt financing is back in the limelight as China's second largest property developer Evergrande teeters on the brink of default. Those questions can only be answered with a little more transparency from the stablecoins issuer. And it could offer savvy investors the opportunity to hedge against the Tether Bomb an affectionate term for the fact that nobody really From 2018 onwards, new stablecoins have been pouring onto the markets. In absolute terms, the sizes look something like this: A chart like the one above doesnt give a sense of the rate of growth for each, but this does: Bitcoin and USDT look somewhat related, but does one move as a function of the other? The transformation of value in the digital age. The information on this website is subject to change without notice. Join the most important conversation in crypto and Web3 taking place in Austin, Texas, April 26-28. "The only interest of Tether is maintaining a liquid and extremely safe portfolio," he said. What does one have to do with the other? News and analysis for the professional investor. Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts. promo Overall, the studio has a watchful eye. 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.. As we have indicated in our published statements and our most recent assurance attestation with a reporting date of June 30, 2021, the vast majority of the commercial paper held by Tether is in A-2 and above rated issuers.. In November 2018, it had to transfer a substantial portion of its backing to Bitfinex after a loss of funds, meaning that it no longer met its claim of being fully backed by US dollars. Hit him up! 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. In February, the operator and the related trading platform Bitfinex pledged to offer more transparency on its reserves under the terms of an $18.5m settlement with the New York attorney-generals office, leading to the most recent disclosures last month. 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. Sign up for free newsletters and get more CNBC delivered to your inbox. Cramer said his crypto concerns right now begin with tether, a stablecoin that's pegged to the U.S. dollar. But is it bad? You will receive a link to create a new password via email. 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. Sign up for The Node, our daily newsletter bringing you the biggest crypto news and ideas. Analysis-Investors grappling with Evergrande fallout weigh risk of wider pain, This sprinting robot could become your next beach lifeguard, Domino effect as more EU institutions ban TikTok on work devices, TikTok is setting time-limits for teens. Learn more about Consensus 2023, CoinDesks longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Sign up for Crypto for Advisors, our weekly newsletter defining crypto, digital assets and the future of finance. To a fair extent, staying in the same playing field as Evergrande makes Tether susceptible to the domino effect. Something weird happened today in crypto-world. Join our Telegram Group and get trading signals, a free trading course and daily communication with crypto fans! Investors aren't only looking at audits, there's also regulation. Or perhaps there are other ways to explain things. In addition to being a major real estate developer, Evergrande is also China's largest issuer of commercial paper (very short-term corporate bonds). Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers. Critics say it's not enough. The enshittification of apps is real. The tumble appears to have been triggered by the mounting problems at embattled property giant China. A report from the end of 2020 shows that Evergrande has just around 10% of the money owed. 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. This comes as the Evergrande debt crisis and rival stablecoins shine a spotlight on Tether's reserves again. The outlet estimated that the actual figure could be even higher, since it has other units, which also issue commercial paper. Now onto the crypto context, if you have not guess it already, Tether's USDT that tracks the value of the US dollar is backed by a significant amount of Chinese commercial paper. 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. "Tether said they have no Evergrande exposure," Cramer acknowledged. The company is currently under investigation by multiple law enforcement agencies, including the U.S. Department of Justice and the Federal Bureau of Investigation. "The vast majority of the commercial paper held by Tether is . HONGKONG Tether, the worlds 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. Be a smarter, safer investor in eight weeks. "Tether does not hold any commercial paper or other debt or securities issued by Evergrande and has never done so," the company said. The biggest crypto news and ideas of the day. Get the latest business insights from Dun & Bradstreet. In those two years, bitcoins market cap has gone up eight times, from $159 billion to $1.3 trillion. ", 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. Head to consensus.coindesk.com to register and buy your pass now. Your Use of the Site. Stanley will arrange a new seating arrangement sporadically. Your Use of the Site. Given Tethers record to this point, that may take a while. In fact, $30 billion of the Tethers dollar holdings are invested in commercial paper, which makes one of the largest holders of this debt asset class and puts the firm ahead of some top financial firms. Bitcoin and other cryptocurrencies were crashing Monday amid a global selloff in risk assets. Ardoino clarified that Tether does not hold Evergrande's commercial paper. CoinDesk journalists are not allowed to purchase stock outright in DCG. Crypto Long &. The developer on Thursday applied to suspend trading of that unit's. At the same time, hot topics such as regulation, competition and the Evergrande debt crisis are shining a spotlight on that "old information". NOW WATCH: WATCH: How any business can use live shopping to net thousands of dollars per stream, said every tether coin was fully backed by US dollars in bank accounts. Call Cramer: 1-800-743-CNBC, Want to take a deep dive into Cramer's world? These frauds even show some sign of being tacitly approved by the Chinese government, to the extent that they have targeted investors abroad. Tether is completely unbacked USD that gives these exchanges the liquidity they need to market make derivatives that have non-linear . It is also alleged that Tether also owns commercial paper issued by Evergrande, Chinas second-largest real estate developer, which is itself experiencing a major liquidity crisis. It has tried to quell the heightened concerns expressed by mainstream financial media regarding its dollar reserves. There is a chance that were currently staring down the barrel of the next financial meltdown.. Can it be liquidated to meet redemptions? Tether has faced scrutiny from authorities and investigators in the past. A Division of NBCUniversal. It goes something like this: About half of all bitcoin trades against stablecoin tether (USDT), according to data from CryptoCompare. We want to hear from you. Yet, does Tether truly own a lot of Chinese commercial paper? Well, think of a detective in a movie who takes a corkboard, some photos and a lot of white strings to put all the parts of a story together. Evergrande's main unit had 205.7 billion yuan ($32 billion) worth of commercial paper at the end of 2020, filings show. "So if A1 commercial paper rated by a US Agency is considered safe [then] why is where the issuer located matters?". 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. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information. Which countries have embraced a 4-day workweek and hows it going. Among other signs of serious mismanagement, customers have made large deposits on Evergrande apartments that were never built. Analysis: Goldman Sachs faces hard sell for its consumer assets, Ex-Goldman banker Ng deserves 15 years in prison, US prosecutors say, Reporting by Alun John Today, Bloomberg BusinessWeek reported that stablecoin issuer Tether owns billions of dollars worth of commercial paper issued by large Chinese firms and that it may be using these assets to back up its stablecoin reserves. 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. A growing swarm of debris in space has led the U.S. government to attempt to set new space hygiene norms, while private companies are also investing in ways to tackle the messy orbital environment. 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. 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. But the relatively staid coins are making up a growing proportion of the overall market, with a value of around $127 billion. He also shares his expectations on stablecoin regulation and competition. Kryptowhrungsunterricht/E-Book-Download. In fact, Tether claimed earlier in the year that 50% of its reserves come from commercial paper. With Tether we are welcoming all that. cookies As we have indicated in our published statements and in our most recent assurance attestation with a reporting date of June 30, 2021, the vast majority of the commercial paper held by Tether is in . read more. Just last month, Bitfinex, Tethers parent company, tried to block CoinDesk from accessing the specifics of its commercial paper holdings by filing a petition in New York Supreme Court. As demand for tether grew, market participants started to question whether that was the case. No, I think this theory is baloney. 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. "Tether does not hold any commercial paper or other debt or securities issued by Evergrande and has never done so," the company said. Reuters described Evergrande as "the biggest issuer of commercial papers". 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. Markets cant function without transparent information flows, full stop. Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. Tethers previous public attestations include various short-term deposits and commercial paper kept as reserves to back the USDT stablecoin. Evergrande is trying to find a way to cut costs and sell off some of its assets to dig its way out. Head to consensus.coindesk.com to register and buy your pass now. In an interview, stablecoin Tether's tech chief Paolo Ardoino lays out the case for holding commercial paper in its reserves. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. Which countries in the EU are buying the most electric cars? document.write('