Tether Resumes USDT Loans Nearly A Year After Discontinuing Them

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Stablecoin coin issuer Tether has announced it is resuming lending USDT to clients. The announcement comes less than a year after the company announced it would stop issuing loans.

Tether has reported an increase in USDT-denominated loans in its latest quarterly financial update.

Tether Resumes Collateralized Loans

The revelation about the resumption of USDT loans to clients came from the company’s latest quarterly financial update. The report showed that as of the 30th of June, assets included around $5.5 billion in loans. This figure is up from the $5.3 billion issued in the previous quarter. Tether spokesperson Alex Welch confirmed the developments, stating that the company had indeed begun extending clients’ new loans during the second quarter of 2023. Welch stated,

“We received a few short-term loan requests from clients with whom we have cultivated long-standing relationships, and we made the decision to accommodate these requests.”

Welch stated that there were two primary reasons Tether resumed extending USDT loans. The first reason was to prevent any depletion and disruption of customer liquidity. This would ensure the company’s clients could continue their regular operations without any liquidity issues. The second reason was to assist clients so they would not have to sell their collateral at any unfavorable places. However, the company has released very little information about who is borrowing the tokens or what the borrowers are putting up as collateral.

Tether’s Previous Announcement

Tether’s announcement about the resumption of loans starkly contrasts with the announcement it made last year. The company had stated that it would reduce secured loans in its reserves to zero.

“After the events that have unfolded this year, the company recognizes that it is mission critical to restore faith in the market. Today, in addition to dismissing the recent cycle of Tether FUD that’s hitting the rumor mill, Tether is announcing starting from now, throughout 2023, it will reduce secured loans in Tether’s reserves to zero.”

The company made the statement in the aftermath of the unprecedented colla

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Author: Amara Khatri

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