USDT issuer Tether has up to $1.7B in excess reserves, CTO says

Cryptocurrency steadfast Tether, which issues the stablecoin USDT (USDT), expects to marque a $700 cardinal nett successful the archetypal 4th of 2023, matching the profits of the past 4th of 2022, Tether main exertion serviceman Paolo Ardoino told Cointelegraph astatine Paris Blockchain Week 2023.

“I don’t person the last figures yet, but the nett of this 4th volition astir apt lucifer the past 4th of 2022,” Ardoino said, adding that successful Q4 2022, Tether generated $700 cardinal of profits. He added that Tether besides has an “addition to that $950 million” astatine Dec. 31, 2022, noting:

“So it means that our institution equity volition turn to $1.5 cardinal oregon $1.7 cardinal that are connected apical of the reserves that we person that are backing 100% of the assets.”

Tether CTO went connected to accidental that USDT is becoming much the “safest plus to clasp successful the world” due to the fact that the institution is antithetic from the banks that are based connected the fractional reserve model. He specifically referred to the ongoing situation successful the United States banking system, with banks similar Silicon Valley Bank (SVB) collapsing owed to its fractional reserve model.

Ardoino besides mentioned that helium had been a instrumentality of the large cryptocurrency Bitcoin (BTC), which is Tether’s hedge, stating:

“I emotion Bitcoin and that's our hedge and that's wherefore we are successful Bitcoin, due to the fact that we don't spot those guys that they took truthful overmuch hazard connected lawsuit deposits.”

AS antecedently reported, Tether was aggressively cutting its commercialized insubstantial backing past year, eventually reducing it to zero by precocious 2022. In summation to removing commercialized insubstantial from its reserves, Tether was replacing those investments with U.S. Treasury Bills.

The quality comes amid Tether continuing to summation its marketplace dominance, with USDT’s marketplace capitalization adding astir $8 cardinal since Feb. 28. At the clip of writing, USDT marketplace worth stands astatine $79 billion, which is the highest level since May 2022, according to information from CoinGecko.

USDT marketplace capitalization one-year chart. Source: CoinGecko

While USDT marketplace dominance has been connected the rise, Circle’s rival stablecoin USDC has been losing its marketplace share, with marketplace headdress dropping 18% since precocious February.

Related: Tether CTO connected USDC depeg: ‘Bitcoin maxis were close each along’ | PBW 2023

Circle has faced large issues owed to its vulnerability to the illness of SVB, with the USDC stablecoin concisely losing its 1:1 peg with the U.S. dollar. The stablecoin subsequently re-pegged amid Circle announcing Cross River arsenic a caller banking spouse and expanding ties with BNY Mellon.

Magazine: Unstablecoins: Depegging, slope runs and different risks loom