Tether Stablecoin Claims It Is Not Holding Any Commercial Paper From Evergrande

Stablecoin Tether claimed in a recent statement that it is not holding any of the commercial papers belonging to Evergrande (the second-biggest property developer in terms of sales). Previously, Evergrande issued a warning for being in danger due to massive debts. It is pursuing a way to minimize the costs to sell some of its assets to further think it through.

Evergrande’s current status

The striving giant of real estate has recorded $300 billion under the cumulative liabilities. Thus, it says, there is a requirement to seek funds rapidly. A possibility in the present situation may refer to a “government bailout.” A report regarding a commercial paper was published in the later period of 2021, which elucidated that the main unit thereof had approximately $32 billion counting up to 10% of the cumulative liabilities of Evergrande.

Evergrande has, at this time, to halt the trading of the onshore corporate bonds of its unit after a downgrade. This appears to be another difficult phase alarming about an approaching default. The notice about the downgrade was received by Evergrande on 15th September issued by China-Chengxin-International. It was added in the stock filing that the company has also been listed for possible upcoming downgrades to be expected in the future. Evergrande remained successful in collecting up to $8 billion till August, as per a Bloomberg published report.

Tether illuminates its position

As per a Tether spokesperson, Tether does not have any of the commercial papers and/or securities delivered by Evergrande. Rather, it explained that it has not ever done such. It has been reported earlier that Tether has recently assured about this scenario that the significant majority of Ether-held commercial paper is related to A-2 and the issuers above it. Reuters stated that nearly 50% of $62.8 billion under Tether, which was held in assets during the early phase of the 2021’s July, was supported by deposit certificates and commercial paper.

Through a tweet series regarding the news of Evergrande, Adam Cochran (a Cinnemhian Ventures partner) revealed that it would expressively be bullish for the crypto world if USDC or Tether did collapse on a general level. Because, he elaborated, for being unable to cash out the holdings, people would on a large scale begin converting those assets into BTC/ETH without taking the price into account. He also mentioned that Evergrande’s failure could prove to be the start of a huge fallout.