- Tether increased its excess reserves by $850 million to $3.3 billion.
- The reserves aim to build market trust after the catastrophic crypto market in 2022.
Tether disclosed that its treasury reserve holdings that back USDT tokens increased by $850 million to $3.3 billion in Q2 2023. The excess reserves are not included in the 100% reserves the stablecoin issuer maintains for redeeming USDT tokens in supply.
In its Q2 attestation report, Tether also disclosed, for the first time, $72.5 billion of exposure to U.S. treasuries. The treasuries include direct T-bill investments, money market funds deposits, and repurchase agreements.
The company also unveiled energy-related investments. Tether didn’t include them in the Q2 report as it believes they are not suitable reserves for the circulating USDT tokens. Bitcoin (BTC) holdings in the quarter reached $1.67 billion, up from $1.5 billion in the prior quarter.
Overall, the company’s operational profits were $1 billion in the quarter, up 30% from Q1 2023. Tether attributed the increase in quarterly performance to recoveries in the crypto markets, which saw Bitcoin rise to the $30,000 mark.
Tether’s Excess Reserves Are Geared Toward Building Market Trust
The report comes amid growing calls for market scrutiny after catastrophic failures of crypto firms and exchanges in 2022. Tether’s CTO Paolo Ardoino believes under-collateralized operations and assets threaten the crypto ecosystem’s stability. He says,
“We believe open communication and strong financials foster trust and reliability, and this is what the global community deserves, especially in a year devastated by many failures across the banking and crypto industry.”
85% of Tether’s reserves are cash and cash equivalents. The company’s total assets in Q2 2023 were $86.4 billion, against $83.17 billion liabilities. Also, it will conduct a $115 million share repurchase to “strengthen” the group.
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