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  • Writer's pictureDavid Manion

Tether reports 30% profit decline.


Tether reports 30% profit decline.
Tether reports 30% profit decline.

Tether, the issuer of stablecoin USDT, has recently released its Q2 2023 attestation report on July 31. The report shows that Tether had an "operational profit" of $1 billion in the second quarter, which is a decrease of about 30% from its Q1 profit of $1.48 billion. However, the $1 billion profit still represents a 30% increase from Q2 of 2022. Tether has also disclosed a share buyback worth $115 million and its investments in energy-related initiatives, which were financed by some of the profits from Q2. It is important to note that Tether has clarified that the investment in energy-related initiatives is not included in the CRR as they are not considered as an eligible reserve for the token in circulation.


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Tether reports 30% profit decline. Tether Sees Increase In Excess Reserves

Tether, a cryptocurrency company, has reported an increase of $850 million in their excess reserves in the second year of 2021, bringing their total excess reserves to approximately $3.3 billion. These excess reserves are not distributed as dividends to shareholders, but are instead used to support the 100% reserves that are used to back all USDT in circulation. This decision is made to maintain the stability of the token. Tether reports 30% profit decline.


Tether has stated that keeping an additional 4% of its assets within its reserves is a risk management decision that is necessary to protect customers' funds. The company believes that this practice should be adopted by other players in the industry to prevent under-collateralization, which can weaken the entire system.


USDT market cap at $83.8 billion | Source: Market Cap USDT on Tradingview.com
USDT market cap at $83.8 billion | Source: Market Cap USDT on Tradingview.com

Remaining Committed To Transparency

In 2021, Tether agreed to release quarterly reports on its reserves for two years as part of its settlement with the authorities. However, the company continues to release these reports as part of its commitment to transparency despite fulfilling its agreement with the authorities earlier this year.


As part of the report, Tether’s CTO stated:

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.

Despite past criticisms regarding its reserves and whether or not USDT tokens in circulation were fully backed, Tether has been able to maintain its peg to the US dollar. The USDT token currently holds the position of the largest stablecoin in the market with a market cap of $83.8 billion, while its closest competitor, Circle's USDC, has a market cap of $26 billion according to CoinMarketCap data.


Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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