USDT and its issuer remain a controversial pair in the crypto market.
The world’s top stablecoin issuer, Tether (USDT), may finally have something to cheer about following the publication of its latest quarterly financials. Per the Thursday release, Tether generated a “net profit” of $700 million in the last quarter of 2022. Interestingly, however, this is the first time the firm would publicly declare a profit. And according to the issuer, the money would be used to bolster its reserves.
Tether (USDT) Continues to Assuage Fears Over Its Reserves
It is worth noting that Tether has long been rocked by concerns that its tokens may not be completely backed one-to-one by an equivalent value of reserves. So, adding its profits to its reserves is not exactly surprising per se. It is rather a show of stability, according to Paolo Ardoino, Tether’s chief technology officer. Ardoino wrote in part:
″…Tether has once again proven its stability, its resilience and its ability to handle bear markets and black swan events, setting itself apart from the bad actors of the industry.”
Meanwhile, fears over Tether’s reserves first surfaced last May. That was when its stablecoin USDT momentarily lost its peg to the dollar. Although that was caused by the crash of terraUSD, Tether immediately responded saying its ability to return cash to holders remains intact.
Also, holders remained skeptical of Tether’s former choice of reserves. At a time, it held a large part of its assets in commercial paper, a form of unsecured, short-term corporate debt. And for that, many investors thought that massive withdrawals could potentially lead to a liquidity crisis for the firm.
In response to those concerns, Tether once again claimed to have completely removed commercial paper holdings from its balance sheet, replacing them with US Treasury bills.
Going by Thursday’s report, the firm also confirms that over 58% of its assets now consist of Treasury bills. Besides, its assets worth about $67 billion has also surpassed its $66 billion worth of liabilities.
Despite this, USDT and its issuer remain a controversial pair in the crypto market. Also, there are reports that the US Department of Justice is actively investigating executives at Tether over possible bank fraud.