Redeems $600 Million in One Day! Tether Survives Decoupling, CTO Paolo Ardoino: Continues to Reduce Commercial Paper

Tether's US dollar stablecoin USDT experienced a decoupling event in the secondary market on the 12th, with fluctuations ranging from 2% to 5%. Despite Tether's official 1:1 redemption maintenance and the exchange Bitfinex continuously offering redemptions of USD at close to 1:1 prices, Tether's CTO, Paolo Ardoino, guaranteed the redemption, which still sparked discussions in the community and provided profit opportunities for many arbitrageurs.

Tether's US dollar stablecoin USDT experienced a disconnection in secondary market trading on the 12th, with fluctuations reaching 2-5%. Despite Tether's official 1:1 redemption maintenance and the exchange Bitfinex continuously offering redemptions of USD at nearly 1, Tether's CTO Paolo Ardoino guaranteed the redemption. This incident sparked discussions in the community and provided many arbitrage opportunities.

On the evening of the 12th, USDT's trading price returned to normal. Both Bloomberg and Reuters reported on Tether's re-establishment of its peg.

In a Twitter live chat, CTO Paolo Ardoino stated that over half of Tether's reserves are in U.S. Treasury bonds, ensuring quick liquidity for those looking to redeem USD. According to him, users have redeemed $600 million in the past 24 hours.

After the disconnection incident, he also tweeted that 1 USDT = 1 USD has always been the case:

Due to Tether's reserve assets including corporate bonds, which are less liquid compared to cash and cash equivalents, there have been ongoing doubts in various circles about its ability to maintain the 1:1 redemption promise. Tether has stated multiple times its reduction in commercial paper reserves. In the latest report by Reuters, CTO Paolo Ardoino mentioned ongoing reductions and plans to disclose more later this month.

The current official publication of reserve asset allocation data is updated until December 2021: