CoinShares: "No problem with Tether's financial soundness... Recent concerns are overblown"

Amid continuing controversy over the financial stability of stablecoin issuer Tether (USDT), CoinShares has actively rebutted, saying "the concerns are exaggerated."

On the 5th (local time), James Butterfill, head of research at CoinShares, explained, "Tether holds sufficient reserves of $181 billion compared with total liabilities of $174.45 billion," and "while the risks of stablecoins in general should be guarded against, based solely on current data Tether's financial soundness does not appear to be problematic."

Earlier, Arthur Hayes, co-founder of BitMEX, pointed out that expectations of interest rate cuts by the U.S. Federal Reserve (Fed) could reduce Tether's key source of income, Treasury yield income. He claimed, "Tether has changed its portfolio composition by increasing purchases of gold and Bitcoin, but if the value of those assets falls by 30%, its equity could be wiped out."

In response, Butterfill said, "Tether is currently recording a surplus of approximately $6.78 billion, and interest income from reserve assets alone has generated cumulative returns of over $10 billion," saying that Tether's operational strategy itself is not problematic.