The biggest stablecoin issuing platform Tether has witnessed an elevation in its stablecoin loans this year. The respective development is surprising despite the platform having declared it would eliminate such loans to just 0 in December last year. The exclusive quarterly report that the firm published made a new revelation. It pointed out that the assets under its possession took into account loans worth $5.5B as of 30 June.
Tether’s Stablecoin Loans Surge in 2023 Irrespective of Downsizing Announcement Last Year
This is increased from the previous quarter’s $5.3 billion. A spokesperson from the platform commented on this development. The spokesperson discussed the recent elevation in the stablecoin loans. According to the spokesperson, it is credited to some short-term loan requests that some consumers made. With those clients, the company has refined longstanding relationships.
The spokesperson added that the firm has a strategy to decrease the respective loans to 0 by the next year. Stablecoin loans have seen a famous lending product in the case of Tether, permitting clients to borrow the USDT tokens from Tether. However, there is a need for them to deposit some collateral in return. On the other hand, such secured loans always went through controversy because of a deficiency in the borrowers and collateral.
The Wall Street Journal’s Report Raised Concerns about Collateralization of Tether’s Products
Back in December last year, The Wall Street Journal published a report that raised concerns. It said that the products as well as assertions that the loans did not have complete collateralization. Hence, the WSJ questioned the ability of Tether to meet redemption requirements amid the crisis. Tether focused on the controversies back in the year 2022 before disclosing its strategy to eradicate secured loans this year. At that time, the stablecoin platform said that the concerns regarding secured loans were just “FUD.”
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