​Tether makes almost $1,5 billion in profit for the first quarter of 2023

What’s new? On May 10, Tether, the issuer of the USDT stablecoin, released its financial report for the first quarter of 2023. During that period, its net profit amounted to $1,48 billion, and its excess reserves were at a record $2,44 billion as of March 31. The total number of tokens in circulation rose by 20%. The report was prepared by BDO Italia, one of the world’s top five accounting firms.

Material on the Tether website

Tether is the largest issuer of stablecoins in the crypto market. Centralized USDT, which is pegged to the US dollar, ranks third in the overall cryptocurrency ranking as of May 11 with a capitalization of $82,66 billion.

What else is known? Tether’s assets are divided into different categories to increase the transparency of the report. Physical gold, overnight repo, corporate bonds, and bitcoin are presented separately.

Tether ended Q1 2023 with consolidated total assets of $81,8 billion. Most of its reserves are invested in US Treasury bills. The company is also taking steps to reduce its reliance on net bank deposits as a source of liquidity and is instead using the repo market as an additional measure to ensure high standards of protection for its users.

Most of its investments (about 85%) are in cash and cash equivalents and other short-term deposits. Tether’s secured loans decreased from 8,7% to 6,5%, with gold and bitcoin accounting for 4% and 2% of total reserves, respectively. All of the new token issuances were invested in US Treasury bills or placed in overnight repos. Tether’s consolidated assets totaled $81,83 billion and exceeded its consolidated liabilities of $79,37 billion.

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“We continue to monitor the risk-adjusted return on all assets within our portfolio on an ongoing basis and expect to make further changes as the overall economic environment changes and the market cycle progresses. Looking ahead to Q2, we have an extremely positive outlook and remain committed to transparency, which is why we have introduced new categories in the reserves’ breakdown in our quarterly report,” added Tether CTO Paolo Ardoino.

Ardoino previously stated that Tether expected $700 million in Q1 earnings and that the company’s total excess reserves were expected to exceed $1,6 billion by the end of March. At the end of the first three months of the year, both were well above expectations.

Tether processed $18,2 trillion in transactions in 2022, outpacing traditional payment systems Visa and Mastercard, which processed $14,1 trillion and $7,7 trillion in transactions, respectively.