Stablecoin operator Tether Holdings withdrew more than $4.5 billion from banks in the first quarter of 2023, leading to a "significant reduction" in counterparty risk, the company said in a post touting BDO Italia's latest certification.
The market capitalization grew from $66 billion to more than $82 billion in the first quarter, while Tether lost more than 90% of its bank deposits, bringing its market capitalization down from $5.3 billion to $481 million. Tether said the remaining bank deposits were spread across Several banks, referring to losses suffered by its rivals following recent bank failures.
Meanwhile, Tether pushed its US Treasury bills to a new high of more than $53 billion, or 64% of its reserves. Combined with other assets, Tether's USDT token is now 85% backed by cash, cash equivalents, and short-term deposits that “can be sold quickly to process redemptions.” This includes more than $7.5 billion in repurchase facilities also: “A decade of high yields has driven up revenues and increased Tethers' surplus reserves, effectively overcollateralizing USDT.”
Tether Discloses Its Gold and Bitcoin Holdings, It said it demonstrated its commitment to transparency for the first time in its certification this quarter. It highlighted its financial success for the quarter compared to other companies, citing BlackRock, Netflix, Starbucks s, Cash App and PayPal as companies that outperformed it in profit. For months, Tether has been working hard to improve its financial metrics and has taken pains to emphasize its success. It announced in June that it would reduce the amount of commercial paper in its reserves from $ 20 billion to $8.4 billion by the end of the month and to zero by the end of the year. It successfully achieved that goal. Tether, which is owned by Hong Kong-based iFinex, has been pushing back against negative doubts and allegations about its finances.Rumor has it that Tether made large investments in Chinese commercial paper when the sprawling Chinese Evergrande conglomerate was going through a financial crisis.
Tether was fined $18.5 million in 2021 by the New York Attorney General's Office for misrepresenting the statutory backing of its reserves. The settlement also calls for greater financial transparency from stablecoin issuers. This month, former SEC Office of Internet Enforcement chi ef John Reed Stark had a ton of "fantastic" tweets with Tether CTO Paolo Ardoino. Civilized exchange of ideas", calling Tether a "huge house of cards".
Stark noted that Tether promised to commission a full audit in "months, not years" in 2021, which has yet to materialize. A certification, such as the one issued this quarter, typically has a narrower focus and does not provide an outside opinion on the company's financial health.
