Stablecoin Tether to reduce riskier exposure

On Friday, Tether, the world's largest stable coin, said it had cut its commercial paper holdings by around 58 per cent as part of an earlier commitment to reduce its exposure to riskier assets.

Stablecoins - a variety of cryptocurrencies designed to keep a steady value - are in sharp focus after the collapse of the TerraUSD token in May.

Usually, stable coin is used in criptocurrency trading and ether is the preferred medium for moving funds between cryptocurrencies and regular cash, due to the reserves of assets such as the U.S. dollar, gold and government debt.

The U.S. Treasury bonds and commercial paper are used to short-term debt issued by companies.

The token has $8.4 billion of commercial paper and plans to reduce its holdings to $3.5 billion by the end of July, according to a statement.

In a bid to address concerns about the quality of assets underpinning its token amid the market meltdown, the company wants to reduce its commercial paper holdings to zero.

Tether had slid below its 1: 1 peg to the dollar in May before recovering, a fall that had sent shockwaves across the sector.