According to a recent report, Tether Holdings has published its 2023 quarter two financial attestation, which revealed that the firm raised about $850 Million for its excess reserve to give a total of a whopping $3.3 billion apart from its 100% USDT issuance reserve.
According to the report, the issuer of Tether USD stablecoin (USDT), Tether Holding, recently did its public auditing anchored by BDO. During the publication, Tether stated that it has a massive excess reserve that is worth $3.3 billion. In addition, it holds about $72.5 billion in its treasury reserve.
Furthermore, it was reported that the stablecoin firm continues to improve its treasury reserve pool to back its circulating USDT token, as revealed in the 2023 Q2 financial attestation report of the firm.
According to the attestation report, the firm made a massive increase as it added about $ $850 million to its sovereign excess reserves, which accumulated to a total of $3.3B. Furthermore, the leading stablecoin revealed that it has $72.5 billion total exposure in United States Treasury Bills. By aggregating everything together, the Tether Stablecoin is backed by a Treasuries reserve of $72.5 billion.
According to the report, this would be the first event when Tether Holdings would publicly disclose its indirect exposure to the US Treasurys, which the money market funds held. Also, it is the first time that the United States Treasurys will be collateralizing its overnight repo.
Tether Created Excess Reserve
In a recent interview with a news outlet, Paolo Ardoino, the CTO at Tether, stated that the United States Treasury account holding of Tether has the same value as the reserves of sovereign countries such as Mexico.
Furthermore, he revealed that during the period when the FTX exchange collapsed, followed by the bankruptcy of lending companies like the 3AC, the giant stablecoin issuer, Tether, had already been seeking to allot the profits it makes to develop excess reserves, which it has successfully raised to about $3.3 billion today.
He also pointed out that the excess reserve is not part of the 100%/reserve, which the firm uses in executing transactions issued with the circulating USDT Tokens.
The CTO explained that big firms that possess undercollateralized operations or assets weaken the broader crypto market and in order to mitigate their impact, the decision of creating a sizeable excess reserve where shareholders’ profits would be deposited was brought up.
Ardoino continued that the stablecoin firm believed in building trust and reliability through open communications and strong financial backing. He said this is precisely what the community members of the platform needed for year-long devastation caused by collapses and failures that rampaged the crypto and banking system.
Tether Records Massive Gains In Q2
Meanwhile, the report also showed that Tether Holdings made massive gains from April to June (Q2 2023), raking in $1 billion, which was about 30% more than its revenue in Q1 of 2023. This massive performance in the 2nd quarter also mirrored across the broader crypto market.
Furthermore, in the 2nd quarter, it was noted that about 85% of Tether’s reserves were held in liquid investments, including cash and its equivalents. Also, the firm’s recent financial attestation revealed that it has a total asset of $86.4B. Also, the outstanding liabilities of the firm in relation to the USDT stablecoin in circulation was summed up to about $83.2 billion.
According to the Q2 report, the Shareholders of Tether plans to issue a buyback scheme worth about $115 million in shares to support the group. Also, the profits realized from the 2nd quarter have reportedly been utilized on other investments in the energy sector.
However, Tether pointed out that its investments in the energy sector were not recorded in the financial attestation for Q2 report as the investment does not seem suitable enough to support the circulating USDT. Meanwhile, spectators are debating whether Tether was referring to its recent $1 billion investment in the renewable energy project recently launched by the El Salvador government or not.