Tether earns $700 million in Q1, taking excess reserves to $1.6 billion
Tether chief technology officer Paolo Ardoino said the world’s largest stablecoin issuer expects to earn more than $700 million in the January-Mach quarter, which will be added to the reserve backing its stablecoin (USDT).
Speaking at Paris Blockchain Week 2023, Ardoino said the first quarter’s profit would take Tether’s excess reserves to $1.6 billion.
“I don’t have the final figures yet, but the profit of this quarter will probably match the last quarter of 2022, So it means that our company equity will grow to $1.5 billion or $1.7 billion that are on top of the reserves that we have that are backing 100% of the assets,” Ardoino told Cointelegraph.
Tether, which is owned by Hong Kong-headquarter Ifinex, revealed a breakdown of its reserves for December 2022, as well as a complete list of USDT reserve custodians. The breakdown, dated as of December 31, 2022, shows that Tether held 100% of its $67 billion reserves in consolidated total assets alongside excess reserves of at least $960 million.
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.
Meanwhile, Tether moved $39 billion of its reserves to Cantor Fitzgerald, making the Wall Street bond trading house the custodian of its largest pool of reserves, based on its circulating supply. Details of how Tether managed those assets haven’t been widely known.
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.
Onboarding a major accounting firm, which can be held accountable by third parties for financial information, to engage in an audit of a crypto token was also a notable success for Tether’s initiative. The developing nature of the cryptocurrency industry, combined with the lack of regulatory oversight, makes the potential risk associated with a comprehensive audit of USDT or any other crypto asset too high for accountancy firms.
Tether seeks to reassure investors that its cryptocurrency is backed by U.S. dollars after the major stablecoin has been dogged by speculation that it holds insufficient capital to support its market cap of USDT.
As the company continues to face questions about what its USDT token is actually backed by, Tether has been reducing the amount of corporate debts in its reserves.
