Tether, the popular cryptocurrency stablecoin, has announced an increase in its treasury reserve holdings for the second quarter of 2023. In its latest financial attestation, Tether revealed that its excess reserves have risen by $850 million, bringing the total to $3.3 billion.
Tether Holdings published its Q2 attestation, which was conducted by accounting firm BDO. The report also disclosed Tether’s indirect exposure to United States Treasuries held by money market funds and U.S. Treasuries collateralizing its overnight repo. When combined, these holdings amount to approximately $72.5 billion, serving as a strong backing for Tether’s stablecoins.
This attestation marks the first time that Tether has revealed its exposure to US Treasuries, providing transparency and reassurance to its users. Paolo Ardoino, Tether’s chief technology officer, stated in an interview earlier this year that Tether’s US Treasury bill holdings were comparable to those held by sovereign nations like Mexico.
Tether’s decision to increase its excess reserves comes as a response to recent market events, such as the collapse of FTX and several bankrupt cryptocurrency lending firms. These incidents highlighted the vulnerabilities within the cryptocurrency ecosystem and prompted Tether to strengthen its financial position. It is important to note that the excess reserves mentioned in the report do not include the 100% reserves that Tether maintains to redeem circulating USDT tokens.
In the second quarter of 2023, Tether reported operational profits of $1 billion, representing a 30% increase from the previous quarter. This improvement in performance aligns with the overall surge in the cryptocurrency markets, which saw Bitcoin consolidating around the $30,000 mark.
The report also outlined Tether’s asset allocation, with 85% of its reserves held in “liquid” investments like cash or cash equivalents. Tether’s total assets are estimated to be $86.4 billion, while its outstanding liabilities related to circulating USDT tokens stand at $83.17 billion.
Additionally, the report mentioned that Tether’s shareholders will initiate a $115 million share buyback to strengthen the company. Furthermore, profits from the second quarter have been allocated to “other investments in energy-related initiatives.” Although these initiatives are not included in the attestation report, Tether sees them as valuable investments for the company’s growth.
Cointelegraph reached out to Tether for clarification regarding the energy-related investments mentioned in the report. It remains unclear whether these investments are related to Tether’s recent announcement of a $1 billion investment in El Salvador’s renewable energy project.
Overall, Tether’s attestation report for Q2 2023 highlights the company’s commitment to transparency and solid financial backing for its stablecoins. By strengthening its excess reserves and continuously disclosing its investments, Tether aims to foster trust and reliability within the global cryptocurrency community, especially during a time when failures in the banking and crypto industries have been prevalent.
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