Tether Excess Reserves increase by $850M to reach $3.3B as Leading Stablecoin Reveals $72.5B overall exposure in US T-Bills and Unveils Energy-Related Investments

Tether Excess Reserves increase by 850M to reach $3.3B as Leading Stablecoin Reveals $72.5B overall exposure in US T-Bills and Unveils Energy-Related Investments
by Tether | Jul 31 2023

Today, Tether Holdings Limited published its assurance opinion for Q2 of 2023 completed by BDO, 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 June 30, 2023. The CRR provides increased transparency into Tether’s reserves, presenting for the first time its indirect exposure to US Treasuries (a look through into US Treasuries held by the Money Market Funds) as well as its exposure to the US Treasuries that are collateralizing its Overnight Repo. In a continuation of Tether's public commitment towards openness, it also reveals an increase in its excess reserves of about $850M, bringing its total excess reserves to approximately $3.3B at the end of Q2, reinforcing the stability of Tether. 

As a reminder, excess reserves are the company's own profits - not distributed to shareholders and which the company has decided to keep on top of the 100% reserves that Tether maintains to back all the outstanding tokens.

In light of the recent banking and crypto industry issues, with players often heavily undercollateralized bringing weakness to the whole system, Tether once again demonstrates the importance of taking the right risk management decisions and care for its community, keeping almost an additional 4% of assets within its reserves.

Tether’s operational profits are over $1B for the time period of April 2023 to June 2023, which corresponds to a significant 30% increase quarter over quarter. 

Tether is also disclosing a share buyback, a healthy sign of consolidation amounting to 115M USD made to further strengthen the shareholder group, and other investments in energy-related initiatives financed from the profits of this quarter which explain the difference between the announced profit and the respective increase in the excess reserves in the attestation. The investment in energy-related initiatives are not included in the CRR as these are not considered by Tether as an eligible reserve for the token in circulation.   

Tether's reserves remain extremely liquid, with 85% of its investments held in cash and cash equivalents. With this latest report, Tether is again demonstrating its commitment to transparency by disclosing its direct, indirect exposure (via Money Market Funds) to US Treasury bills as well as the Treasuries collateralizing the Overnight Repo. By aggregating them together, the amount of Treasuries backing Tether’s stablecoins is about $72.5B. 

The CRR indicates, and BDO independent attestation confirms, that Tether’s consolidated assets once again exceed its consolidated liabilities.

The Management of the Company asserts the following as of 30 June 2023:

  • The Group’s consolidated total assets amount to at least US$ 86,499,251,218.

  • The Group’s consolidated total liabilities amount to US$ 83,200,775,340 of which US$ 83,178,020,411 relate to digital tokens issued.

  • The Group’s consolidated assets exceed its consolidated liabilities.

You can read the latest assurance opinion and the Consolidated Reserves Report here

“I am immensely proud of our most recent reserves attestation, reaffirming our unwavering commitment to transparency,” said Paolo Ardoino, CTO of Tether. “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. Our long-term goal has always been to drive innovation as a global player, pushing the boundaries of tech and imagination. By continuously improving our reserves attestation process, we aim to set new standards in the industry and inspire others to follow suit. As we move forward, we remain dedicated to embracing accountability, enhancing risk management and security, leading by example. With a firm focus on transparency, we aim to shape a future where every participant in the global financial ecosystem can confidently navigate a realm built on trust and innovation. That’s why in this quarter, Tether’s USD₮ token in circulation surpassed its previous all-time high."

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