Tether earns $1 billion in Q2, ups reserves to $86.5 billion
Tether, the issuer behind the industry’s largest stablecoin USDT, reported nearly $850 million in excess reserves for the second half of 2023, taking its totals up to $3.3 billion, an all-time high of surplus over its liabilities.
According to its latest assurance report, the consolidated total assets held by the company as of June amounted to at least $86.5 billion, a 6 percent increase from the $81.7 billion reported at the end of March.
Tether had a stellar performance in the second quarter of 2023, with operational profits reaching $1 billion from April to June, a substantial 30% increase compared to the previous quarter. The surge was partly driven by the appreciation of Bitcoin price, which hovered around the $30,000 mark in the quarter.
Tether, which is owned by Hong Kong-headquartered Ifinex, also provided a breakdown of its reserves, as well as a complete list of USDT reserve custodians.
Tether’s reserves remain “extremely liquid,” the company says, with the majority of its investments being held in cash, cash equivalents, and other short-term deposits. The group’s largest exposure is now to U.S. Treasury Bills, which are short-term debt securities issued by the American government.
The data further showed that the firm finished the second quarter with zero commercial paper, after this risk form of unsecured debts was eliminated from its books in the fourth quarter.
Per the report, the surge in demand for stablecoins as a means of transacting in the crypto markets and the growth of DeFi applications that use stablecoins as collateral have played a significant role in Tether’s solid performance. However, this growth could be also attributed to concerns surrounding the de-pegging of Circle’s USDC stablecoin and a drop in BUSD circulation.
In a statement coinciding with the report’s release, Tether’s chief technology officer Paolo Ardoino said: “With a firm focus on transparency, we aim to shape a future where every participant in the global financial ecosystem can confidently navigate a realm built on trust and innovation. That’s why in this quarter, Tether’s USD₮ token in circulation surpassed its previous all-time high.”
Ardoino added that Tether’s shareholders decided to carry out a $115 million share buyback. Additionally, the profits earned in the second quarter are being channeled into “other investments in energy-related initiatives.”
Tether has switched the accounting firm that audits the massive reserves that back its USDT token to BDO Italia, the 5th largest accounting firm in the world. It officially began working with BDO Italia in July 2022 for its quarterly attestations. With this alignment, the issuer moved towards the release of its attestations from a quarterly basis to monthly reports.