Last Updated on May 16, 2023 by COINBUZZFEED
In a significant move to reduce its exposure to potential bank failures, Tether, the popular stablecoin issuer, has taken measures to minimize its bank deposits while expanding its asset reserves. Tether has recently reported a substantial decrease in its bank deposits from $5.3 billion to $481 million during the first quarter of this year. This strategic decision aims to mitigate risks and ensure the stability of the Tether ecosystem.
Tether diversifying its asset reserves with Bitcoin and Gold
Additionally, Tether has made a groundbreaking move by diversifying its asset reserves. For the first time in its history, Tether has included gold and bitcoin as part of its reserve holdings. Gold now accounts for approximately 4% of Tether’s total reserves, amounting to approximately $3.2 billion, while bitcoin makes up 1.8% of the reserves, equivalent to around $1.45 billion.
The reduction in bank deposits by Tether signifies a proactive approach to safeguarding against potential bank failures. By holding a smaller amount of funds in traditional banks, Tether aims to minimize its vulnerability to economic disruptions or financial instability. This strategic decision aligns with Tether’s commitment to maintaining the stability and trustworthiness of its stablecoin.
