evergrande tether commercial paper

Something weird happened today in crypto-world. 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. Your Use of the Site. "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. The US Treasury is expected to release an in-depth report on stablecoins any day now. No, I think this theory is baloney. Head to consensus.coindesk.com to register and buy your pass now. The biggest crypto news and ideas of the day. Join the most important conversation in crypto and Web3 taking place in Austin, Texas, April 26-28. 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. 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. But these have frequently raised more questions than answers. Among other signs of serious mismanagement, customers have made large deposits on Evergrande apartments that were never built. This stability means they offer an accessible - if boring - entry and exit point to the crypto world. 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. Evergrande has now had to suspend trading of that units onshore corporate bonds following a downgrade, another red flag pointing towards an impending default. So while Evergrande may not be on the books, the concern is that the commercial paper may be from other real estate firms. 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 . Or perhaps there are other ways to explain things. Bitcoin, meanwhile, remained above all-time highs by about 5.5%. Evergrandes main unit had 205.7 billion yuan ($32 billion) worth of commercial paper at the end of 2020, filings show. The vast majority of the commercial paper held by Tether is in A-2 and above rated issuers.. 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. Tether has been beset by transparency concerns in the past as well. Probing the intersection of crypto and government. While Tether (the company) said back in September it doesn't hold Evergrande commercial paper, . 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. Evergrande has now had to suspend trading of. madcap@cnbc.com. 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. Another 18 per cent is held in fiduciary deposits, more than 12 per cent in secured loans and nearly 10 per cent. Holiday events will take place, but it is silently frowned upon to join in. The developers debt is spread across an army of banks and other financial institutions, leading some analysts to worry that its collapse would have systemic impacts comparable to the fall of Lehman Brothers, which kicked off the Great Recession 13 years ago. A stock exchange filing added that Evergrande was added to a watch list for possible further downgrades in the future. In May, it provided a breakdown of these reserves, which Tether claims included just under $30bn in commercial paper, a short-dated investment similar to cash. Evergrande is trying to find a way to cut costs and sell off some of its assets to dig its way out. read more. Be a smarter, safer investor in eight weeks. 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, 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 . According to the attorney-generals investigation, there were instances when Tether was not fully backed in the past. different direction, choosing to only use cash reserves and cash equivalents, US Treasury is expected to release an in-depth report on stablecoins. Evergrande's main unit had 205.7 billion yuan ($32 billion) worth of commercial paper at the end of 2020, filings show. 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. The latest moves in crypto markets, in context. A week after its stablecoin briefly lost its 1:1 peg with the U.S. Dollar, Tether's Q1 2022 assurance report shows it has reduced the commercial paper in its USDT reserves by 16.8%.. As of March 31, Tether 's $82 billion reserves were 86% cash and cash equivalents, the rest includes $4 billion in corporate bonds, $3 billion secured loans, and $5 billion other investments like cryptocurrencies . News and analysis for the professional investor. Its been going on for a long time one analyst who warned about Evergrandes practices as early as 2012 was temporarily banned from Hong Kong markets by regulators for his reckless claims. 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. Tether said that it funnelled roughly half its reserves into commercial paper. 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. 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. 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. 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. The most recent attestation states the average credit rating of its commercial paper holdings is "A-1" - an. Bitcoin and other cryptocurrencies were crashing Monday amid a global selloff in risk assets. In a series of tweets about the Evergrande news, partner at Cinnemhian Ventures Adam Cochran, said that IF either Tether or USDC did meltdown in a global collapse though, itd actually be bullish for crypto, as if you couldnt use them to cash out, people would just start bulk converting them into BTC/ETH regardless of price., Cochran added that, despite not being a well-known name in the West, the failure of Evergrande could have massive fallout. Mad Money Twitter - Jim Cramer Twitter - Facebook - Instagram, Questions, comments, suggestions for the "Mad Money" website? Tether, the largest stablecoin, is a Hong-Kong based stable currency. 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. "There is an entire world outside of the US," Ardoino said. Evergrande, Chinas second-largest property developer by sales, recently warned that it was in danger of defaulting on massive debts. Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. According to Reuters, around 50% of Tethers $62.8 billion in held assets at the beginning of July 2021, was backed by commercial paper and certificates of deposit. It has tried to quell the heightened concerns expressed by mainstream financial media regarding its dollar reserves. In response to the Bloomberg BW report, it released a blog post claiming that the report is spreading misinformation.. The transformation of value in the digital age. Stablecoin Tether says it does not hold any commercial paper from Evergrande in recent a statement. 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. Overall, the studio has a watchful eye. 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. Which countries in the EU are buying the most electric cars? Which countries have banned TikTok, and why? 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. Markets cant function without transparent information flows, full stop. Hoegner said the commercial paper reserves included amounts held internationally with further sub-custody at major global institutions. That marks a significant decrease in commercial paper, from $24 billion to $20 billion in the first quarter of 2022. "Tether does not hold any commercial paper or other debt or securities issued by Evergrande and has never done so," the company said. Decentral Media, Inc. is not an investment advisor. document.write(''); Stablecoin Tether says it does not hold any commercial paper from Evergrande in recent a statement. About half of Tether's roughly $75 billion in assets, which back USDT, is in commercial paper. Global Business and Financial News, Stock Quotes, and Market Data and Analysis. 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. "While old information about Tether's reserves and so on is public, it keeps growing," Ardoino said. Hit him up! Understanding the magnitude of size and growth of USDT, bitcoin and Chinese commercial paper may help give some perspective to the latest headlines. 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. JPMorgans analysts said the large commercial paper holdings may suggest that Tether is struggling to find a bank willing to take its cash as a deposit. 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. Lab leak theory: 3 years on, will we ever know where COVID came from? Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. At the same time, hot topics such as regulation, competition and the Evergrande debt crisis are shining a spotlight on that "old information". 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. Ardoino wouldn't comment on whether the Treasury directly spoke to Tether for the report. The biggest crypto news and ideas of the day. promo 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. The developer on Thursday applied to suspend trading of that unit's. 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. 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. 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 enshittification of apps is real. The developer on Thursday applied to suspend trading of that unit's. 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. Your Use of the Site. According to documents received byBloomberg BusinessWeek, Tether has extended billions of dollars in loans to large Chinese companies. "So if you own crypto in any form and you've got big gains, I recommend taking something off the table.". Tether has revealed that its commercial paper holdings would be $3.5 billion by July 31. var rnd = window.rnd || Math.floor(Math.random()*10e6); But Stuart Hoegner, Tethers general counsel, said: With respect to reputation, we believe we are seeing the opposite: more and more counterparties are comfortable with Tether and our transparency initiatives and are keen to work with us.. Krypto. Evergrande is just the latest major Chinese firm to have serious problems due to apparent fraud or mismanagement. There is a chance that were currently staring down the barrel of the next financial meltdown.. We believe that this is the only way that these technologies are really created and can become mainstream.". This is not the first time concerns about the true value of USDT have emerged. 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. That type of heavy-handed control is at the core of Chinas conundrum as an authoritarian state trying to reap the rewards of capitalism. All evidence points to tether's CP as a formal accounting trick to say "we just give a bunch of Tether to FTX, Binance, and Cumberland as stand in for USD to provide liquidity". 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. Questions for Cramer? Tether grants you a limited license to access and make personal use of the Site. Well send you a myFT Daily Digest email rounding up the latest Cryptocurrencies news every morning. But since it's unsecured, there is also very little recourse for investors if an issuer does default. analyse how our Sites are used. "The vast majority of the commercial paper held by Tether is in A-2 and above rated issuers. 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. HONG KONG, Sept 16 (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 (3333.HK), as regulatory scrutiny into risks from this type of token grow. Tether's market capitalization surged 357% in the last year to around $69 billion. The downgrade notice was sent to Evergrande on Sept. 15 from China Chengxin International. "It's impossible to reach these levels of success in such a short time without genuine organic interest and really wide demand from the broader crypto trading industry," Paolo Ardoino, Tether's chief technology officer, told Insider in a recent interview. Many stablecoin companies have followed Tether's lead both with attestation and the use of commercial paper. JPMorgan estimates stablecoin operator would be one of the largest investors in the US market, Tethers commercial paper disclosure places it among global giants, Video: Why every Dogecoin has its day - crypto explained, Russian far-right fighter claims border stunt exposes Putins weakness, Germany seeks to buy Leopard tanks from Switzerland, Germany and Italy stall EU ban on combustion engines, Russia on alert after reconnaissance group crosses over from Ukraine, Ukraine asks EU for 250,000 artillery shells a month, Panic station at Fox News: how the Murdochs agonised over Trumps loss, UK cabbage king turns to plant-based proteins, Saudi owner of Londons most expensive house sued over alleged unpaid private jet bills, UK housing market braced for make-or-break spring, Airlines plan to sue Dutch government over Schiphol airport flight cap, There are no domestic equity investors: why companies are fleeing Londons stock market, Deluge of inflation data pushes US borrowing costs to 2007 levels, Live news updates from March 3: Amazon pauses HQ2 construction, UK regulators launch LME probe, Clutching Warrens letter, Im still positive on stocks, Fears for London market after SoftBanks Arm and building group CRH opt for New York, Joe Biden teaches the EU a lesson or two on big state dirigisme. 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. Weve got lots of inquiries and heard lots of discussion, but have not seen any active participation, said Deborah Cunningham at Federated Hermes.Until last week we hadnt really heard of them, said a trader at a large bank. Tethers previous public attestations include various short-term deposits and commercial paper kept as reserves to back the USDT stablecoin. Evergrande's main unit had 205.7 billion yuan ($32 billion) worth of commercial paper at the end of 2020, filings show. var abkw = window.abkw || ''; Given Tethers record to this point, that may take a while. But the relatively staid coins are making up a growing proportion of the overall market, with a value of around $127 billion. By signing up, you will receive emails about CoinDesk products and you agree to ourterms & conditionsandprivacy policy. Ardoino joined Tether back in late 2015 as a developer before being appointed chief technology officer around a year later. Learn more about Consensus 2023, CoinDesks longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Chinese real estate developers are some of the worlds biggest issuers of commercial paper. However, Tether is very secretive about its holdings, only disclosing that it does hold international commercial paper. It seems increasingly likely that Evergrande is fated instead for the glue factory. Crypto investors need to be alert while the Evergrande situation unfolds even if they don't personally own tether because the stablecoin is used to purchase bitcoin and ether, Cramer said. The transformation of value in the digital age. Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. 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. All Rights Reserved. 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. In the NYAG investigation, the company was found to be conducting illegal activities in New York.

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