Stablecoin Tether says it does not hold any Evergrande commercial paper


The China Evergrande Center building sign is seen in Hong Kong, China. August 25, 2021. REUTERS / Tyrone Siu / File Photo

HONG KONG, Sept. 16 (Reuters) – Tether, the world’s largest stablecoin, said in a statement that it does not hold any commercial paper or securities issued by struggling developer China Evergrande Group (3333.HK) , as part of the regulatory review of the risks of this type of token grows.

Evergrande, which has total liabilities of more than $ 300 billion, is also in the spotlight as it scrambles to raise funds, swinging between a messy collapse with wide-ranging impacts, a managed collapse or a bailout of the government.

“Tether does not and never owns any commercial paper or other debt or securities issued by Evergrande,” the company said.

“The vast majority of commercial paper held by Tether is owned by issuers rated A-2 and above.”

Regulators are starting to pay more attention to stablecoins – digital tokens whose value is tied to other assets, often the U.S. dollar, and backed by a pool of assets – and some observers have expressed concerns about liquidity of tokens in times of stress. . Read more

According to the company, about half of Tether’s $ 62.8 billion in assets at the end of June 2021 were backed by commercial paper and certificates of deposit.

Evergrande’s main unit held 205.7 billion yuan ($ 32 billion) of commercial paper at the end of 2020, according to the filings.

The developer on Thursday requested that trading in the unit’s onshore corporate bonds be suspended following a downgrade, which market participants said indicated a growing likelihood of defaults and restructuring. Read more

Reporting by Alun John Editing by Mark Potter

Our standards: Thomson Reuters Trust Principles.

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