Market Analysis Report (10 Feb 2023)

Leading stablecoin issuer Tether has published its latest quarterly financials, in which it revealed it made a $700 million “net profit” in the last quarter of 2022, marking the first time the firm generated a profit.

Tether, which is owned by Hong-Kong headquartered firm Ifinex, said its latest quarterly results were boosted by interest rate hikes by the U.S. Federal Reserve, which led to higher yields on government debt the firm holds in its reserve.

The stablecoin issuer makes money from fees, including a $1,000 withdrawal fee it charges, with the minimum withdrawable amount being $100,000. It also has investments in digital assets and precious metals, and issues loans to other institutions.

The firm also collects interest on the funds it holds as reserves for its stablecoins. USDT, its leading stablecoin, has a market capitalization of over $68 billion and is backed by a variety of assets.

Tether was in the past under fire for holding a large portion of its reserves in commercial paper, a form of unsecured, short-term corporate debt. It has since gotten rid of its commercial paper holdings, replacing them with U.S. Treasury bills, which the firm says now make up more than 58% of its reserve.

It also said it reduced secured loans on its balance sheet by $300 million, and revealed that in the September-December period, it had $67 billion in assets against $66 billion in liabilities.

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• Source: https://www.cryptocompare.com/email-updates/daily/2023/feb/10/