The issuer of the largest stablecoin, Tether, reportedly continued lending the USDT stablecoin to customers even after declaring that it would not continue with the action, according to recent information published in a Wall Street Journal report.
As the publication highlighted, on September 21, a spokesperson for the USDT issuer confirmed that Tether made new loans to customers.
“During the second quarter of 2023, we received some short-term loan requests from customers with whom we have cultivated long-standing relationships and made the decision to honor those requests,” said Alex Welch, spokesperson for Tether Holdings.
According to the spokesperson, the reasons for the action were to avoid a possible depletion of its customers’ liquidity, as well as to help them so that they would not have to dispose of their guarantees at bad prices.
However, Welch highlighted that loans made by Tether would be reduced to zero by 2024. It is worth noting that in an announcement on its blog in 2022, the company stated that it would reduce its loans to zero this year.
In response to the Wall Street Journal, Tether said: “Traditional financial institutions are not responding to the needs of their customers in a way that is detrimental to a thriving economy, and few have taken the time to examine this more deeply. Instead, they are spending it scrutinizing Tether, which, in the interest of its customers, has accumulated more than $3.3 billion in excess reserves to effectively reduce exposure to safe loans as a net result.”
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