Tethers own press release last month showed them as having around 5% cash and treasury bills (more or less as liquid and stable as cash). Most of the rest is unspecified "commercial paper" - if that is commercial paper from, say, Apple, no problem. If its a debt issued by unregulated, offshore, heavily leveraged crypto exchanges, it could be more or less worthless. The general consensus is that if it was the former, they'd say so, so its far more likely the latter.
> The general consensus is that if it was the former, they'd say so, so its far more likely the latter.
They specifically describe their loans as "secured loans (none to affiliated entities)". There's no such annotation on their "commercial paper", giving the impression that this category (which amounts to slightly under 50% of their overall holdings) may consist in large part of loans to other crypto exchanges, possibly in the form of Tether tokens.
