Tether, a prominent stablecoin provider, has released its Q3 2023 report, indicating that it holds $3.2 billion in surplus reserves supporting the value of its stablecoins, including USDT.
On October 31, Tether Holdings Limited made public its Consolidated Reserves Report (CRR) for Q3 2023, validated by the renowned global accounting firm BDO. The report showcases that the highest-ever percentage of Tether’s reserves is now held in Cash and Cash Equivalents (C&Ceq), amounting to 85.7%.
As of September 30, 2023, Tether boasts consolidated assets worth an impressive $86.4 billion, with liabilities standing at $83.2 billion. A significant portion of these reserves comprises US Treasury securities, including direct T-bill investments, repurchase agreements, and money market fund deposits, totaling a substantial $72.6 billion.
Breaking down Tether’s reserves for Q3 2023, $56.6 billion is invested in US Treasury bills with a maturity of less than 90 days. Additionally, $8.8 billion is engaged in reverse repurchase agreements involving these bills, and $8.2 billion is held in US Money Market funds pegged to $1 per note.
Tether’s Strategic Reserves and Investment Measures
In a strategic move to reinforce its reserves and investments, Tether has notably reduced its reliance on secured loans. The latest report reveals that secured loans now account for only $5.1 billion of USDT reserves, a significant reduction of approximately $336 million from the previous report.
Tether is actively working to further reduce loans by the end of October, with plans to wind down an additional $1.1 billion, leaving just $900 million in loans as part of the reserves. The company’s vision is to gradually phase out secured loans, leveraging excess reserves and undistributed profits. As of September 30, 2023, Tether’s surplus reserves had reached an impressive $3.2 billion, while secured loans constituted only $2 billion within USDT reserves.
Looking ahead to October 31, 2023, Tether anticipates holding $4.2 billion in excess reserves and a mere $0.9 billion in secured loans, underscoring its commitment to bolstering the stability of its stablecoin, USDT.
Tether has also disclosed remarkable quarterly returns from cash and cash equivalent investments, approaching an impressive $1 billion. Additionally, the company has invested over $800 million in industry-related research fields over the year, with nearly $670 million allocated in the most recent quarter alone. These investments span areas such as sustainable energy, Bitcoin mining, data, and P2P technology. In Q3 2023, Tether directed over $668 million toward these critical sectors, bringing the total investment in 2023 to $809 million.
CEO of Tether, Paolo Ardoino, commented on the company’s achievements, stating, “We’ve achieved the highest ever percentage of our reserves held in Cash and Cash Equivalents, signaling our dedication to maintaining liquidity and stability within the stablecoin ecosystem. Our ability to reduce secured loans and weather market volatility is a demonstration of our robust risk management strategies. We are proud of the robustness of Tether’s operational profits, showcasing our financial strength and resilience.”
Tether Enhances Stability with Diversified Asset Holdings Besides USDT, Reports Strong Financial Position
Tether, a leading stablecoin provider with an impressive market capitalization of $84 billion, has taken strategic steps to bolster its financial position. The company’s decision to allocate $1.7 billion in Bitcoin and $3.1 billion in gold introduces an additional layer of diversification to its already robust portfolio. Tether’s USDT is renowned as one of the most widely used stablecoins, and the company issues various digital currencies pegged to different fiat currencies and gold. This diversification strategy is aimed at enhancing the stability and resilience of Tether’s financial assets.
Tether’s financial success is influenced by various factors, including higher interest rates that contribute to strong returns on the company’s holdings. The company reported impressive quarterly returns, nearing $1 billion, a testament to the profitability of its stablecoin operations.
However, Tether has faced criticism in recent months for the continued increase in its stablecoin lending or secured loans throughout 2023, despite prior announcements of plans to reduce such loans to zero by December 2022.
To maintain transparency and accountability, BDO consistently publishes attestations of Tether’s reserves every quarter, with a one-month lag between the end of the quarter and the publication of the report. Furthermore, Tether has revealed plans to introduce a system for providing real-time audit reports by 2024, enhancing the company’s commitment to financial integrity and trust.
