Regulatory authorities have been putting a lot of pressure on Tether. The watchdogs’ focus has now switched to the commercial paper reserve. As a result, the organization has had an extremely busy week. The regulators are concentrating their efforts on the components of the Tether reserves.
According to a source, Tether’s Michael Hsu stated that US officials are looking at the paper to see if every Tether Token is truly backed by $1 as the business promises.
Tether is being scrutinized by US regulators.
According to what we’ve gathered, Janet Yellen, the US Treasury Secretary, is leading the investigation into Tether. Yellen has already conducted meetings to discuss the potential hazards of stablecoins.
The “President’s Working Group on Financial Markets” is now trying to figure out if Tether actually does have as much commercial paper as it claims. Commercial papers are debt securities that businesses offer to investors to raise short-term capital.
The Working Group, on the other hand, does not accept the promises, comparing it to a mutual fund that can lose all of its investment in a single day. The total amount of USDT in circulation is currently 62 billion. As a result, there appears to be a valid reason for concern.
As BTC goes above the $40k barrier, the crypto market is once again bullish.
Tether published the makeup of its overall reserves two months ago. It had more instruments that weren’t only cash or currency equivalents, such as bonds, secured loans, bitcoin, and a bigger amount of commercial papers, according to the stablecoin.
Stuart Hoegner, Tether’s general counsel, indicated to insiders that the corporation is planning a full examination in the coming months. Remember that Tether has never conducted such audits previously, and the announcement made a lot of investors feel better.
On July 19, however, Yellen was overheard pushing lawmakers to create rules that will govern the use of stablecoins in the financial sector.
There are more calls for crypto regulation.
After pushing for stablecoin regulation, Yellen received a letter from Senator Elizabeth Warren nine days later, asking her to fight for more regulation of the cryptocurrency industry as a whole.
Warren recently expressed her disapproval of the crypto business during a Senate Banking Committee hearing. It was preferable, she said, to hand over the financial systems to huge banks rather than some faceless, mysterious miners and super-coders.
During the hearing, however, Preston Byrne, an Anderson Kill Law partner, noted that the most alarming aspect is that Elizabeth Warren controls the banking system. Elizabeth has been a United States Senator since 2013 and is a Democrat.