Tether posts $6.2 billion profit in 2023, reserves top $97 billion

abdelaziz Fathi

Tether, the company behind the world’s largest stablecoin, has reported a record $2.9 billion net profit for Q4 2023. This milestone was revealed in its latest attestation report, conducted by the global auditing firm BDO.

S&P casts doubt on Tether's stability, USDT reserves

The report also highlighted a significant increase in excess reserves backing Tether’s tokens in circulation, marking an all-time high for the company.

The net operating profit for the quarter stood at around $1 billion, primarily driven by holdings of U.S. Treasuries. Additionally, the appreciation in the value of Tether’s bitcoin and gold reserves contributed substantially to the overall gains.

This profit boost has increased Tether’s excess reserves by $2.2 billion, bringing the total to $5.4 billion. The remaining profit was allocated to fund various project investments, including mining, AI infrastructure, and P2P communications. These investments are not considered part of Tether’s reserves.

BDO’s attestation confirmed that Tether’s $4.8 billion in outstanding unsecured loans at the year’s end were fully covered by these excess reserves. Tether expressed pride in having eliminated the risk of secured loans from its token reserves, a move in response to community concerns about this portfolio aspect.

The company’s primary business, running USDT stablecoin, was a key driver of its annual net profit of $6.2 billion. Additionally, Tether acquired 8,888 bitcoins in Q4, bringing its total holdings to approximately 66,465 BTC, valued around $2.8 billion.

As of December 31, Tether’s consolidated reserves were at least $97 billion, including large holdings in U.S. Treasuries ($80.3 billion) and gold ($3.5 billion). The firm’s consolidated liabilities related to issued digital tokens stood at $91.6 billion, with 90% backed by cash or cash equivalents.

Paolo Ardoino, Tether’s CTO and new CEO, commented: “Achieving the highest percentage of reserves in Cash and Cash Equivalents reflects our dedication to liquidity and stability. The substantial net profits generated not only in the last quarter of the year but throughout the year, amounting to $6.2 billion, showcases our financial strength. Furthermore, our investments in sustainable energy, Bitcoin mining, data, AI infrastructure, and P2P telecommunications technology illustrate our commitment to a more sustainable and inclusive financial future.”

Earlier this month, Tether received a vote of confidence regarding its financial stability from Howard Lutnick, CEO, and majority owner of Cantor Fitzgerald. In an interview with Bloomberg Television at the World Economic Forum in Davos, Lutnick confirmed that Tether has the funds it claims, based on his firm’s role as a custodian for Tether’s assets. He stated, “From what we’ve seen, and we did a lot of work, they have the money.”

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