By Adedapo Adesanya
Tether Holdings Limited has revealed that it recorded a reserves surplus at an all-time high of $2.44 billion, up 150 per cent (+$1.48 billion) from $0.96 billion in the first three months of the year.
This was published in its assurance opinion for Q1 of 2023, completed by BDO Italia, a top five-ranked global independent public accounting firm.
The attestation re-affirms the accuracy of Tether’s Consolidated Reserves Report (CRR), which breaks down the assets held by the group as of March 31, 2023. The CRR provides, for the first time, additional categories with the aim of increasing transparency in Tether’s reserves reporting.
It revealed an increase in Tether’s excess reserves, reaching an all-time high of $2.44 billion, up $1.48 billion for the first quarter of 2023.
Another excellent quarter for Tether under several aspects: $1.48 billion of net profit strengthening Tether’s reserves and an increase in the token in the circulation of 20 per cent, which is a clear indicator of the trust of Tether’s customers which allows Tether to be very optimistic for the future.
Tether closed the first quarter of 2023 with $81.8 billion in consolidated total assets.
The company said the majority of its reserves are invested in US Treasury Bills.
It has also been working to take steps to reduce its reliance on pure bank deposits as a source of liquidity and instead leverage the Repo market as an additional measure to ensure higher standards of protection for its users by maintaining the required liquidity.
Tether’s reserves remain extremely liquid, with the majority of its investments being held in cash, cash equivalents, and other short-term deposits standing at approximately 85 per cent.
Tether noted that the latest report demonstrates its commitment to transparency and highlights a 25 per cent reduction in secured loans from 8.7 per cent to 6.5 per cent of this asset class within the overall reserves and the highest percentage to date of assets allocated in US Treasury Bills.
Gold and Bitcoin represent circa 4 per cent and 2 per cent of the total reserves, respectively.
It revealed that all new issuance of tokens has been invested in US Treasury bills or placed in overnight Repo.
The CRR also indicates, and BDO independent attestation confirms, that Tether’s consolidated assets once again exceed its consolidated liabilities.
Speaking on the result, Mr Paolo Ardoino, CTO of Tether, said, “We are thrilled with the tremendous success Tether has achieved in Q1 2023, with our reserves’ surplus reaching an all-time high of $2.44 billion.
“Our net profits for the quarter were $1.48 billion, a testament to the strength and stability of our platform. 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 as a part of our normal, ongoing risk management processes.”
“Tether continues to evaluate the global economic environment and has taken necessary steps to ensure that its customers’ funds are not exposed to high-risk scenarios.
“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 to provide even greater transparency to our users,” he added.
Dipo Olowookere