Arthur Hayes: If Tether holds illiquid assets, an unexpected event could trigger concerns about over-collateralization

In response to Tether CEO Paolo Ardoino's disclosure that the company holds U.S. Treasury bonds generating about $500 million in profit each month, Arthur Hayes posted on the X platform, stating that while Tether's profits are high, it is uncertain whether there is a specific dividend policy or if target over-collateralization rates are set based on asset types and their volatility.

"If Tether's liabilities are in dollars and its assets are U.S. Treasury bonds, then there is basically no major issue; however, if Tether's assets are illiquid private investments, then in the event of an unexpected situation, the market will be skeptical about Tether's over-collateralization."