The firm behind the world’s leading stablecoin, Tether, is facing more regulatory pressure this week with U.S. financial watchdogs scrutinizing the composition of its reserves.
According to a July 27 Bloomberg report the Acting Comptroller of the Currency Michael Hsu said regulators are looking into Tether’s stockpile of commercial paper to see whether each USDT token really is backed by the equivalent of one U.S. dollar.
A team of regulators led by Treasury Secretary Janet Yellen has held a high-level, closed-door talk on the risks posed by stablecoins and particularly Tether. Citing “people familiar with the matter”, the report stated the President’s Working Group on Financial Markets was concerned about Tether’s claims that it holds massive amounts of commercial paper. This investment type relates to debts that companies issue to meet their short-term funding needs.