Stablecoin issuer Tether Holdings Limited has reportedly brought down its commercial paper exposure to zero, addressing a long-standing item of contention for detractors who’ve criticized the quality of its reserves. 

Specifically, apart from clearing out commercial paper from its reserves, Tether also revealed its decision to use United States Treasury Bills as replacements for those investments. 

“Reducing commercial papers to zero demonstrates Tether’s commitment to backing its tokens with the most secure reserves in the market,” the company stated. 

Although Tether has long been exposed to public scrutiny regarding its reserves detractors concentrating on the composition of its assets throughout 2021. 

For example, in October last year, Bloomberg reportedly shared speculattions that Tether may have oversized exposure to Chinese commercial paper at a time when one of the nation’s most major property developers, China Evergrande Group, was on the verge of collapse.

Commercial paper operates as a short-term, unsecured debt obligation issued by a corporation or financial institution that typically carries a higher credit risk.

In June, Tether reportedly denounced claims that 85% of its commercial paper portfolio was supported by Chinese or Asian commercial paper. At the time, the firm also claimed it would eventually bring down its commercial paper exposure to zero. 

In the next months, Tether issued periodic updates showing a sharp reduction in its commercial paper reserves.

In August, Tether reportedly worked with BDO Italia, a member of BDO Global’s accounting organization, to start carrying out regular reviews and attestations of its dollar reserves. The stablecoin issuer shared plans down its pipeline to bring up its reporting frequency from quarterly to monthly.