USDT Stablecoin Issuer Tether Reveals Bitcoin, Gold Reserves, Reports Q1 $1.48B Profit

Stablecoin issuer Tether reported $1.48 billion in net profit for the first quarter of the year, double the previous quarter’s result, according to the latest certificate published on Wednesday.

The company for the first time broke out bitcoin (BTC) and gold holdings details in its consolidated reserves report. As of March 31, Tether had $1.5 billion in bitcoin on its balance sheet — or about 2% of its roughly $80 billion in reserves — and $3.4 billion in gold, or about 4% of its reserves.

This quarter’s attestation comes after a turbulent period for the $131 billion stablecoin market, as several tokens lost their dollar pegs in a knock-on effect as the US banking crisis hit Circle’s USDC, the second-largest dollar-pegged stablecoin. The New York Department of Financial Services also forced fintech firm Paxos to stop issuing the third largest stablecoin, Binance USD (BUSD), in February, while the US Securities and Exchange Commission (SEC) reportedly investigated the firm for issuing BUSD as unregistered. Safety.

Tether’s dollar-pegged USDT, the largest stablecoin with a supply of $81.8 billion as of May 9, has been one of the clear winners of the crash, adding $16 billion in market value since the start of the year, or 24% growth. Tether also issues stablecoins pegged to other currencies and gold, which represent a fraction of USDT’s market capitalization.

“Tether has become the most trusted stablecoin in the industry because of its perceived security from the SEC and because of its hedging of the peg in the past,” Conor Ryder, an analyst at research firm Kaiko, wrote in a note.

According to the first quarter certificate signed by financial services firm BDO Italia, Tether had about $2.44 billion in excess reserves out of the $79.4 billion issued Tether tokens in circulation as of March 31. This profit was at a record high, Paolo Ardoino, chief technology officer of Tether, said in the announcement.

All newly issued tokens were invested in US Treasury bills or put into overnight repurchase and reverse repurchase facilities, Tether said. The firm held about 85% of all reserve assets in cash and cash-like assets, US Treasury bills and bank deposits among them.

Tether continued to reduce the amount of secured loans in its reserves, reducing them by about $500 million to $5.3 billion in Q1. The company promised in December to completely exit these stocks this year.

Tether has been criticized in the crypto industry for years for its lack of transparency about its reserve funds and controversial maneuvers. Last year, a US judge ordered the firm to produce documents about USDT’s support as part of a lawsuit alleging Tether conspired to inflate BTC’s price with newly issued stablecoins.

“We have an extremely positive view and remain committed to transparency, which is why we have introduced new categories in the reserve allocation in our quarterly report to provide even greater transparency to our users,” Ardoino said in the statement.