- Tether has unveiled a remarkable surge in its excess reserves.
- Tether has strategically allocated profits to bolster reserves amidst crypto ecosystem vulnerabilities.
- Tether’s improved performance coincides with a significant surge in the cryptocurrency markets.
Tether, in its most recent financial attestation for Q2 of 2023, reveals a continuous growth in its treasury reserve holdings, further backing the circulation of USDT tokens. The publication by accounting firm BDO highlights a substantial $850 million increase in the company’s excess reserves, bringing the total to an impressive $3.3 billion.
Tether Surpasses 17 Countries in Holding US Treasury Bills
This marks the first instance of Tether disclosing its indirect exposure to United States Treasuries held by money market funds being utilized as collateral for its overnight repo.
Combining these holdings, it is revealed that the stablecoins backed by Treasuries amount to a staggering $72.5 billion. Tether’s chief technology officer, Paolo Ardoino, emphasized that Tether’s US Treasury bill holdings were on par with those of sovereign nations like Mexico.
Based on readings presented by the Treasury Department’s website, Tether’s treasury bill holdings surpass those of 17 out of 38 countries listed. The figures, derived from the Treasury Department’s data, reveal that Tether’s $72.5 billion in holdings eclipse the treasury bill reserves of prominent nations such as the United Arab Emirates with $64.9 billion, Australia with $62.2 billion, and Spain with $40.3 billion. The stunning data emphasizes the weight of the firm in the crypto sphere and within the global market as a whole.
Tether Reports $1 Billion Profit Amidst Market Surge
Tether’s strategy involved directing company profits towards building up excess reserves following the upheaval caused by the collapse of FTX and cryptocurrency lending firms like Three Arrows Capital. It is important to note that this excess does not include the 100% reserves maintained by Tether for redeeming circulating USDT tokens.
During Q2 of 2023, Tether reported operational profits of $1 billion, reflecting a significant 30% increase from the previous quarter. This enhanced performance was closely linked to the surge across the cryptocurrency markets, driven by the consolidation of Bitcoin around the $30,000 mark.
The report for Q2 also reveals that a substantial 85% of Tether’s reserves are held in “liquid” investments, comprising cash or cash equivalents. Tether’s total assets are estimated at an impressive $86.4 billion, while outstanding liabilities related to circulating USDT tokens are calculated to be approximately $83.17 billion.
On the Flipside
- Comparing the company’s U.S. Treasury bill holdings to those of sovereign nations can be misleading given the vastly different regulatory frameworks and oversight of national treasuries.
- Tether’s profits and stability are closely tied to the volatile cryptocurrency market, as highlighted by the significant boost in operational profits during a period of market surge.
Why This Matters
Tether’s surging reserves as leading stablecoin status hold significant implications for the broader cryptocurrency market. As Tether’s reserves continue to expand and its USDT tokens maintain their prominence, the stability and trust in the overall crypto ecosystem are reinforced, potentially shaping the market dynamics and investor confidence in the digital asset landscape.
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