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Tether Continues to Improve Its Treasury Reserves
In accordance with Tether's latest Q2 2023 financial statement, the company wholeheartedly continues to further its treasury reserve holdings. These reserves back the circulating USDT (USDT) tokens. The attestation, issued by the BDO accounting firm, indicates an impressive excess reserve increase of $850 million, bringing Tether’s total to a hefty $3.3 billion.
US Treasury Exposure Disclosed for the First Time
Notably factoring into their report is Tether's first-ever disclosure of indirect exposures to U.S. Treasuries via money market funds and U.S. Treasurys backing its overnight repo.
Tether’s Collateral Aligns with Sovereign Nations
In an earlier discussion at Amsterdam's Money2020 in June, Tether's CTO, Paolo Ardoino shed some light on Tether's US Treasury bill holdings, stating they were qualitatively on par with those of independent nations, specifically Mexico.
Tether's Strategy Post FTX and Three Arrows Capital Collapse
Following the devastating implosion of FTX and subsequently bankrupt cryptocurrency lending firms such as Three Arrows Capital, Tether has strategically been building its excess reserves from company profits. It's important to note that these funds are separate from the 100% reserves Tether utilizes to redeem circulating USDT tokens.
Industry Instabilities Drive Tether's Excess Reserves Strategy
Ardoino further explained that due to the presence of weak spots in the wider cryptocurrency ecosystem created by sites with under-collateralized assets or operations, Tether has decided to direct shareholder profits toward a sizeable surplus reserve.
Q2 2023 Performance Indicates Upward Trend for Tether
Reflecting a commendable surge in the cryptocurrency markets and the stabilization of Bitcoin (BTC) around the $30,000 benchmark, Tether's Q2 2023 report reveals an operational profit of $1 billion and a 30% increase from Q1 2023.
Composition of Tether's Reserves
The Q2 report further adds that 85% of Tether’s reserves consist of "liquid" investments, cash or cash equivalents. This report announces its total assets to be around $86.4 billion with a liability of about $83.17 billion related to the circulating USDT tokens.
Shareholder Activities and Further Investments
To fortify its group, Tether's shareholders have scheduled a share buyback of $115 million. Moreover, profits from Q2 were also directed towards other energy-related investments. However, these initiatives do not make an appearance in the attestation report as they are not deemed suitable reserves for circulating tokens.
In pertinent news, Tether has yet to reveal whether these particular investments relate to its recently announced $1 billion venture in El Salvador’s renewable energy sector.
