Tether Attestation Says Second-Quarter Profit Was $850 Million

By David Pan

– Stablecoin issuer’s profit rose even as the sector contracted
– Treasuries backing reserve totaled about $72.5 billion

Tether Holdings Ltd., the operator of the largest stablecoin, said the company’s “own profit” was $850 million in the second quarter.

A third-party attestation by BDO of the $86.5 billion reserves backing its USDT token as of June 30 showed that around 85%, or $73.6 billion, of the collateral supporting USDT was stored in cash and cash-equivalents. Stablecoins are digital tokens that aim to keep a one-to-one value with a less volatile asset like the dollar, typically by maintaining large reserves as segregated collateral.

Tether’s market share and profit have climbed even as the overall use of stablecoins have decreased this year. Data earlier this month from researcher CCData showed that the total value of the crypto market has jumped around 50% to about $1.2 trillion, while the stablecoin sector has shrunk almost 8% to around a two-year low of $127 billion.

Total excess reserves were about $3.3 billion at the end of the second quarter, Tether said in a statement. Tether makes a profit by charging transaction fees and earnings from investments.

Third-party attestations are not the same as financial audits, as they are limited to a snapshot in time and do not allow full access to a company’s books. The quality of assets backing stablecoins like USDT has come under intense scrutiny in recent years, as regulators grew concerned about the liquidity of operators’ reserves and if they could withstand mass redemption requests while under market pressure.

Original source: https://www.bloomberg.com/news/articles/2023-08-08/carlyle-gic-skip-ant-s-buyback-after-valuation-slumps-70