Tether to Halt Secured Lending From Stablecoin Reserves

Tether Holdings Ltd. said it would steadily reduce its practice of lending out funds from its reserves with a view to stopping the activity in 2023.

Tether issues crypto’s largest stablecoin USDT, maintaining a reserve made up of mostly cash and cash-equivalent assets to support the token’s 1:1 stated value with the US dollar. In a third-quarter attestation, the firm said approximately 9% of its reserves consisted of secured loans to other entities.

Concerns had mounted that such loans could pose a risk to Tether’s ability to efficiently redeem USDT tokens for dollars, particularly in the current environment where some ...