2023-08-05 13:14:03
Tether reported an $850 million increase in its reserves in its quarterly report, bringing the excess reserves to $3.3 billion. This means that the entity issuing USDT has $3.3 billion more in assets than the market cap of all issued USDT. Compelling financial data conveys confidence to the market and might solidify USDT’s leadership role for a long time. When designing the USDT, the goal was to maintain constant parity with the US dollar, i.e. the USDT should always be exchangeable with the USD at a 1:1 ratio, and accordingly the company should always have enough reserves to buy back even the entire issued USDT supply. In the case of such a large-scale operation, trust and transparency play a key role: “Tether remains committed to transparency, which it demonstrates by announcing its direct and indirect financial market exposure,” confirmed Paolo Ardoino, Tether’s technology manager, on behalf of the company. its leader. According to the report, 85% of the company’s reserves are in exceptionally liquid financial assets such as cash or instantly redeemable US government bonds. In the first quarter, Tether made a net profit of $1.5 billion, followed by another $1 billion during April and June. During the second quarter, they spent 115 million dollars on share buybacks and energy industry investments. Tether’s consolidated balance sheet as of June 30 was $86.5 billion, in contrast to the $83.2 billion liability on the other side, of which $83.17 billion was related to “issued digital coins.” This means that Tether maintains a surplus of nearly 4%, allaying earlier concerns that the company’s reserves were dangerously close to insolvency. The company’s quarterly report was signed by the internationally recognized auditing firm, BDO. Of course, analysts were also particularly curious regarding Tether’s bitcoin fortune. In the first quarter, Tether announced that it would hold 2% of its reserves in bitcoins, breaking with the tradition that the stablecoin issuer only hopes to generate returns from US bonds – Circle, the second largest stablecoin issuer, USDC, for example, still only keeps its reserves in cash and government bonds. No recent information on the company’s BTC allocation has been released this time, but Paolo Ardoino stated that a relatively small portion of Tether’s profits are invested in Bitcoin mining.
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