evergrande tether commercial paper

This license does not include nor permit your resale or commercial use of the Site or its contents. All quotes delayed a minimum of 15 minutes. 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. About half of Tethers roughly $75 billion in assets, which back USDT, is in commercial paper. A Bloomberg report has claimed to have found that Tether holds billions of dollars worth of Chinese commercial paper. This type of debt financing is back in the limelight as China's second largest property developer Evergrande teeters on the brink of default. Probing the intersection of crypto and government. Hoegner said the commercial paper reserves included amounts held internationally with further sub-custody at major global institutions. 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. Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts. That marks a significant decrease in commercial paper, from $24 billion to $20 billion in the first quarter of 2022. Cramer said his crypto concerns right now begin with tether, a stablecoin that's pegged to the U.S. dollar. Neither Tether nor Bitfinex admitted wrongdoing. The report investigated the quality of assets backing USDT, and alleged the debt assets supporting Tether dollar reserves may of questionable nature. By signing up, you will receive emails about CoinDesk products and you agree to ourterms & conditionsandprivacy policy. When Tether launched in 2014, it said every tether coin was fully backed by US dollars in bank accounts. He also said that Tether did not hold any commercial paper issued by cryptocurrency exchanges or affiliated entities. Evergrande has now had to suspend trading of that units onshore corporate bonds following a downgrade, another red flag pointing towards an impending default. 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. different direction, choosing to only use cash reserves and cash equivalents, US Treasury is expected to release an in-depth report on stablecoins. "Right now, owning crypto is what's known as a 'crowded' trade and I don't want you to lose money if this space keeps getting hit by Evergrande's contagion worries," he said. Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. 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. In the NYAG investigation, the company was found to be conducting illegal activities in New York. Evergrande, Chinas second-largest property developer by sales, recently warned that it was in danger of defaulting on massive debts. But he did lay out his timeline expectations for regulation. News and analysis for the professional investor. All Rights Reserved. Lawrence Lewitinn is CoinDesk's managing editor of global capital markets. You can subscribe to get the full newsletter here. With Tether we are welcoming all that. 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. 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. Yet, does Tether truly own a lot of Chinese commercial paper? There is a chance that were currently staring down the barrel of the next financial meltdown.. Another 18 per cent is held in fiduciary deposits, more than 12 per cent in secured loans and nearly 10 per cent in corporate bonds, funds and precious metals. We want to hear from you. The $1.1tn commercial paper market is vital for large companies looking to raise cash for short-term needs such as payroll and inventories. "But tons of Chinese businesses stand to get crushed by this fiasco, and they have Evergrande exposure, and that could spell real trouble if the dominoes fall here.". What does one have to do with the other? 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. 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. 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. The downgrade from A to AA applies both to the bonds and their issuer rating. Evergrande was successful in raising around $8 billion by August, according to a report from Bloomberg, but it is just a drop in the pan compared to what it still owes. Chinese real estate developers are some of the world's biggest issuers of commercial paper. According to the attorney-generals investigation, there were instances when Tether was not fully backed in the past. It has tried to quell the heightened concerns expressed by mainstream financial media regarding its dollar reserves. In addition to being a major real estate developer, Evergrande is also China's largest issuer of commercial paper (very short-term corporate bonds). Disclosures from cryptocurrency provider Tether suggest it has become one of the worlds largest investors in the US commercial paper market, rubbing shoulders with the likes of fund managers Vanguard and BlackRock and dwarfing the investments of tech giants like Google and Apple, according to estimates from JPMorgan. 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. Global Business and Financial News, Stock Quotes, and Market Data and Analysis. Last March, the Federal Reserve stepped in to buy commercial paper as the pandemic led money market funds, one of the biggest buyers, to pull back. Investors aren't only looking at audits, there's also regulation. Tether, the largest stablecoin, is a Hong-Kong based stable currency. What should a secular society really look like? No, I think this theory is baloney. Such holdings of companies short-term debt would make it the seventh largest in the world. Given Tethers record to this point, that may take a while. Now, the second-largest stablecoin, circle (USDC), is heading in a different direction, choosing to only use cash reserves and cash equivalents. 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. A report from the end of 2020 shows that Evergrande has just around 10% of the money owed. 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. 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. The downgrade notice was sent to Evergrande on Sept. 15 from China Chengxin International. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. See here for a complete list of exchanges and delays. 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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. A government bailout is also a possibility. Please enter your email address. "There is an entire world outside of the US," Ardoino said. "The vast majority of the commercial paper held by Tether is . As a result, even though Tether says it doesn't hold commercial paper issued by Evergrande, an upheaval in the commercial paper market could still have wider . Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology. Tethers defenders can say that even if one were to assume Tether spent half of every dollar it is said to have taken in over the past two years on commercial paper in China, that would be under one-fifth of new issuances and 4% of the market. But the firm has not clarified the exact details of its debtors. madcap@cnbc.com. 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. However, Tether is very secretive about its holdings, only disclosing that it does hold international commercial paper. Sign up for notifications from Insider! About half of Tether's roughly $75 billion in assets, which back USDT, is in commercial paper. Many stablecoin companies have followed Tether's lead both with attestation and the use of commercial paper. Which countries in the EU are buying the most electric cars? How much of it is Chinese or specifically from Evergrande is unclear. Holiday events will take place, but it is silently frowned upon to join in. 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. Those questions can only be answered with a little more transparency from the stablecoins issuer. Find company research, competitor information, contact details & financial data for Tether, Inc. of Seattle, WA. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. 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. For Ardoino and the team, this highlights the crypto community's faith in Tether. But tether's growth of around 3,350% since early 2019 is seen as reason to celebrate. "I think that it's a little bit aggressive, or cocky, to ask that everyone in the world use US agencies, or US auditing companies - otherwise it does not matter, or is not fine," he said. Kryptowhrungsunterricht/E-Book-Download. Krypto. Reuters described Evergrande as "the biggest issuer of commercial papers". "If tether collapsed, well, then it's going to gut the whole crypto ecosystem," he said. read more. Join the most important conversation in crypto and Web3 taking place in Austin, Texas, April 26-28. 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. Tether said that it funnelled roughly half its reserves into commercial paper. Cramer has a position in ether, which runs on the Ethereum blockchain. 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. Tether's market capitalization surged 357% in the last year to around $69 billion. Who to fire? 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. Critics say it's not enough. 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. In an interview, stablecoin Tether's tech chief Paolo Ardoino lays out the case for holding commercial paper in its reserves. Commercial paper typically has low default rates. Sell some, stay long the rest, then let's wait and see if China changes its attitude toward an Evergrande bailout.". Bitcoin, meanwhile, remained above all-time highs by about 5.5%. Regardless of what commercial paper you hold, bonds and commercial paper would take a hit and some issuers may even fold," tweeted Adam Cochran, partner at Cinneamhain Ventures. What financial advisors need to know about crypto. 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. Learn more about Consensus 2023, CoinDesks longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. The stablecoin issuer says its goal is to reduce its commercial paper holdings to zero. Before falling into a major crisis, Chinese property developers had issued commercial paper worth 3.6 trillion yuan ($556 billion) in 202020% higher from 2019. Polygon (MATIC) Price Dropped 9% in One Day so Wheres It Headed Next? The enshittification of apps is real. 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. 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 You will receive a link to create a new password via email. "We are working with an amazing counterparty that is extremely professional and has a deep knowledge of traditional finance and also crypto markets and the blockchain industry and so on. Though its main product since its founding in the 1990s has been housing, Evergrande has grown into a huge conglomerate with products ranging from bottled water to electric cars to a soccer team. Evergrande is trying to find a way to cut costs and sell off some of its assets to dig its way out. Consider this - most of the reserve assets Tether holds to support its USDT are commercial papers (CPs) and certificate of deposits (CDs) instead of the US dollar. Balancing Innovation and Regulation: Why a Risk-Based Approach to Crypto Could Benefit America, Crypto Price Predictions, March 2023: Altcoins Are About to Take a Wild Turn, Top 10 Telegram Channels for Crypto Signals in 2023, Binance Accused of Malpractices Similar to FTX, Navigating Crypto Taxes Made Easy & Cheap: Meet Cryptiony. Head to consensus.coindesk.com to register and buy your pass now. An additional 20% reduction is to show up on the company's Q2 report. Stablecoin Tether says it does not hold any commercial paper from Evergrande in recent a statement. Smart navigation app uses 3D sound to guide blind people. How the biggest companies plan mass lay-offs, The benefits of revealing neurodiversity in the workplace, Tim Peake: I do not see us having a problem getting to Mars, Michelle Yeoh: Finally we are being seen, Our ski trip made me question my life choices, Apocalypse then: lessons from history in tackling climate shocks, Stablecoins: bitcoin for squares has its own downsides. 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 . 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. Perhaps, if one were to scale tether on a different Y-axis like so: Perhaps the tail wags the dog. read more. The transformation of value in the digital age. Mad Money Twitter - Jim Cramer Twitter - Facebook - Instagram, Questions, comments, suggestions for the "Mad Money" website? Crypto markets took a dip Thursday just around the time it was reported that Chinas Evergrande Group was on the verge of defaulting on a bond payment. "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. 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. 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. "I know the crypto-lovers never want to hear me say sell, but if you've got a big gain as I did, well, I'm begging you to," the "Mad Money" host said. For critics of Tether, the new economy of digital assets is based on the worlds oldest profession: real estate speculation. While the embattled housing giant ultimately made its scheduled payment of $148 million, questions persist about the long-term prospects for it and other real estate developers in China. First Mover The latest moves in crypto markets, in context. 2023 CNBC LLC. A wave of smaller stock frauds from 2010-2016 were chronicled in the documentary The China Hustle, and Luckin Coffee put an exclamation point on the trend in 2019. 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. The vast majority of the commercial paper held by Tether is in A-2 and above rated issuers.. In a blog post a few days after its reserves report was released, Hoegner said the commercial paper that the company held was purchased through recognised issuance programmes, the vast majority highly rated, and that there were limits on individual issuers and regional exposures. In early 2021, Tether paid a fine of $18.5 million to settle a case with the New York Attorney General. Well send you a myFT Daily Digest email rounding up the latest Cryptocurrencies news every morning. var absrc = 'https://servedbyadbutler.com/adserve/;ID=177750;size=0x0;setID=588602;type=js;sw='+screen.width+';sh='+screen.height+';spr='+window.devicePixelRatio+';kw='+abkw+';pid='+pid588602+';place='+(plc588602++)+';rnd='+rnd+';click=CLICK_MACRO_PLACEHOLDER'; Tether still expects to be the first to secure an external financial statement audit, which it has been exploring since 2017, but it won't necessarily be from one of the Big Four accountants. 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. The report revealed that the stablecoin company also provided a billion-dollar loan to Celsius, a centralized crypto lending platform that was recently accused of violating securities laws by the U.S. States of Alabama, Texas, and New Jersey. Can it be liquidated to meet redemptions? promo Cash made up only 2.9 per cent, according to the companys disclosure. Evergrande is a major property developer in China, and beyond real estate, it has multiple other business units operating in industries such as health-care services and electric vehicles. Approximately half of Tethers $62.8 billion assets as of the end of June 2021, were backed by commercial paper and certificates of deposit, according to the company. Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. 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. cookies 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. Its flagship unit, Evergrande Real Estate Group, had 205.7 billion yuan ($32 billion) worth of commercial paper at the end of 2020,. Your Use of the Site. 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. Sign up for free newsletters and get more CNBC delivered to your inbox. Tether published its first Reserves Breakdown in March 2021. Evergrande has now had to suspend trading of. Another 18 per cent is held in fiduciary deposits, more than 12 per cent in secured loans and nearly 10 per cent. Understanding the magnitude of size and growth of USDT, bitcoin and Chinese commercial paper may help give some perspective to the latest headlines. The downgrade from A to AA applies both to the bonds and their issuer rating. This stability means they offer an accessible - if boring - entry and exit point to the crypto world. Commercial paper is a form of unsecured, short-term debt issued by companies that doesn't need to be registered with the Securities and Exchange Commission (SEC) as long as it matures before nine months. According to Bloomberg BW, stablecoin issuer Tether has extended billions of dollars in loans to Chinese companies. BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back. Something weird happened today in crypto-world. "While old information about Tether's reserves and so on is public, it keeps growing," Ardoino said. (Reporting by Alun John; Editing by Mark Potter), Ukraine Latest: Russia Continues Efforts to Encircle Bakhmut, INSIGHT-Before fatal collapse, Turkish building had skirted code thanks to Erdogan policy, In Chicago, adapting electric buses to winters challenges, Ukraine ally Kallas fights for reelection in Estonia vote, Global race to boost electric vehicle range in cold weather. He is also now CTO of cryptocurrency exchange Bitfinex. CoinDesk journalists are not allowed to purchase stock outright in DCG. In total, Tether holds 52% US Treasury bonds, 37% commercial paper, with the remainder in cash and money market funds.

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