Disclosures from cryptocurrency provider Tether suggest it has become one of the world’s largest investors in the US commercial paper market, rubbing shoulders with the likes of fund managers Vanguard and BlackRock and dwarfing the investments of tech giants like Google and Apple, according to estimates from JPMorgan.
Tether operates a so-called stablecoin, which it says is backed one-for-one by dollar assets. In May, it provided a breakdown of these reserves, which Tether claims included just under $30bn in commercial paper, a short-dated investment similar to cash. Such holdings of companies’ short-term debt would make it the seventh largest in the world.
But this reported accumulation has largely gone unnoticed on Wall Street, according to several of the biggest players in the market including bank traders, analysts and money market funds.
“We’ve got lots of inquiries and heard lots of discussion, but have not seen any active participation,” said Deborah Cunningham at Federated Hermes. “Until last week we hadn’t really heard of them,” said a trader at a large bank. “It was news to us.”