Today, Tether Holdings Limited published its assurance opinion for Q3 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) and breaks down the assets held by the Group as of September 30, 2023.
The CRR presents Tether's latest update on its reserves revealing a notable milestone, with the highest percentage ever recorded of its reserves held in Cash and Cash Equivalents (C&Ceq), standing at an impressive 85.7%, of which the vast majority are US T-Bills accounting for US$ 72.6 billion comprising both direct and indirect exposure. This signifies a commitment to maintaining liquidity and ensuring stability within the stablecoin ecosystem. Furthermore, the report highlights a substantial reduction in the amount of secured loans extended by Tether, with over $ 330 million dollars. This move further bolsters confidence in Tether's ability to manage its financial assets prudently and underlines its dedication to transparency and accountability within the cryptocurrency space.
In a continuation of Tether's public commitment towards openness, Tether disclosed that, by leveraging its robust risk management strategies, and its capacity to weather market volatility, quarterly returns from Cash and Cash Equivalent investments are once again at close to US $ 1 billion. Tether also disclosed the investments made in industry-related research fields for a total amount of over $ 800 million since the beginning of the year (almost US$ 670 million this quarter). These investments are not considered part of the reserves backing the issued token. The excess reserves buffer remained stable despite market volatility, a showcase of remarkable resilience in the face of fluctuating Gold and Bitcoin prices, valued at fair value as indicated in the CRR, resulting in a reduction of US $116 million for gold inventory and US $195 million for BTC positions at the end of Q3/23. On another positive note, the substantial Gold and Bitcoin price increases witnessed in October have not only offset these fluctuations but have also contributed to an overall strengthening of Tether's financial position, underscoring its unwavering commitment to maintaining a secure and dependable stablecoin ecosystem.
The CRR indicates, and BDO independent attestation confirms, that Tether’s consolidated assets once again exceed its consolidated liabilities.
The Management of the Company asserts the following as of 30 September 2023:
The Group’s consolidated total assets amount to at least US$ 86,384,653,832
The Group’s consolidated total liabilities amount to US$ 83,176,997,409 of which US$ 83,153,363,663 relate to digital tokens issued.
The Group’s consolidated assets exceed its consolidated liabilities.
Tether Group is not considering a part of its reserves backing the issued token the investments made into sustainable energy, Bitcoin mining, data, and P2P technology. During Q3 2023 investments made into these fields reached US$ 668,891,473, and US$ 809,491,473 since the beginning of the year.
You can read the latest assurance opinion and the Consolidated Reserves Report here.
As Tether publicly indicated, the goal of the company is to reduce and eventually remove the exposure of secured loans from the reserves, leveraging the company’s excess reserves and undistributed profits.
The first chart below shows that, as of 30 September 2023, Tether accrued US 3.2 billion in excess reserves, leaving only US$ 2 billion in secured loans as part of USD₮ reserves.
The second chart below shows a forecast (using real-time information), that as of 31 October 2023, Tether holds US$ 4.2 billion in excess reserves, leaving only US$ 0.9 billion in secured loans as part of USD₮ reserves.
"Tether’s Q3 attestation is a testament to our unwavering commitment to transparency, stability, and responsible financial management,” said Paolo Ardoino, CEO of Tether. “We've achieved the highest ever percentage of our reserves held in Cash and Cash Equivalents, signaling our dedication to maintaining liquidity and stability within the stablecoin ecosystem. Our ability to reduce secured loans and weather market volatility is a demonstration of our robust risk management strategies. We are proud of the robustness of Tether's operational profits, showcasing our financial strength and resilience. Moreover, our investments in sustainable energy, Bitcoin mining, data, and P2P technology exemplify our commitment to building a more sustainable and inclusive financial future for all."
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