USDT Issuer Tether Reports A 30% Decline In Profit

Stablecoin USDT issuer Tether published its Q2 2023 attestation report on July 31 and according to the report, Tether recorded an “operational profit” of $1 billion in the second quarter, about a 30% decline from its Q1 profit of $1.48 billion. Although its $1 billion “operational profit” represents a decline from the first quarter, there is a 30% increase in comparison with the Q2 of 2022. Tether also disclosed a share buyback amounting to $115 million and its other investments in energy-related initiatives which are financed by some of the profits from Q2. “The investment in energy-related initiatives is not included in the CRR as these are not considered by Tether as an eligible reserve for the token in circulation, the company clarified. Related Reading: US Presidential Candidate Defends Bitcoin, Calls Out Environmental Critics Tether Sees Increase In Excess Reserves Tether’s excess reserves in the second year of this year increased by $850 million, taking its total excess reserves to around $3.3 billion. These excess reserves are the profits the company doesn’t share as dividends to shareholders. Instead, it holds them to shore up its 100% reserves used in backing all USDT in circulation and maintaining the token’s stability. The company has explained that keeping an additional 4% of its assets within its reserves is one of its risk management decisions as it aims to protect customers’ funds. It believes this move is necessary and one that other players should emulate, as under-collateralization, brings weakness to the whole system. USDT market cap at $83.8 billion | Source: Market Cap USDT on Tradingview.com Remaining Committed To Transparency In 2021, Tether agreed to release quarterly reports on its reserves for two years as part of its settlement with the authorities. However, the company continues to release these reports as part of its commitment to transparency despite fulfilling its agreement with the authorities earlier this year. As part of the report, Tether’s CTO stated: Transparency is not just a buzzword for us; it is the cornerstone of our philosophy. We believe that open communication and strong financials foster trust and reliability, and this is what the global community deserves especially in a year devastated by many failures across the banking and crypto industry. Related Reading: Is It A Good Idea To Buy Curve Now? Here’s What This Founder Thinks Tether has faced criticisms in the past, especially concerning its reserves and whether or not the USDT tokens in circulation were 100% backed. However, despite those allegations, USDT has continued to maintain its peg to the US dollar (re-pegging very quickly every time it dropped below a dollar). The USDT token also remains the largest stablecoin with a market cap of $83.8 billion, with its closest rival, Circle’s USDC, boasting a market cap of $26 billion according to data from CoinMarketCap. Featured image from CryptoSlate, chart from Tradingview.com