Tether Updates Reserve Assets, Cuts Secured Loans


maintain adequate reserves

Tether, Inc., which issues crypto assets (virtual currency) such as the US dollar stablecoin “USDT”, released a report on reserve assets dated December 31, 2022 on the 9th. It has cut back on secured loans, indicating it continues to hold sufficient reserves to support its issued tokens.

Tether had total consolidated assets of more than ¥8.8 trillion ($67 billion), which exceeded its total consolidated liabilities of about ¥8.7 trillion ($66 billion). The excess of reserves over debt appears to have existed by at least about ¥12.6 billion ($960 million). Debt is mostly related to issued tokens.

The report has been prepared as an endorsement opinion by BDO International, one of the world’s largest accounting firms.

Tether also reported that it has reduced its secured loans by about 39.5 billion yen ($300 million). As for the background, in December last year, the Wall Street Journal reported that Tether was increasing the amount of its own tokens to be lent to customers, and that it may not be possible to redeem them in the event of a crisis. be.

In response to the report, Tether said the loans are short-term and require liquid collateral from the lender. It also said it would eliminate such secured loans going forward. Secured loans had just reached about ¥800 billion ($6.1 billion) as of September 30, 2022.

It’s still partial, but within a month of reports, it’s showing that it’s making moves to reduce secured loans, as promised.

connection: US Tether to strengthen asset reliability of USDT

What is a stablecoin

A cryptocurrency whose price is always stable. Stablecoins are a type of cryptocurrency, and unlike volatile assets such as BTC, ETH, and XRP, the purpose is to maintain its value ($1) backed by the US dollar. In addition to US dollar-backed stablecoins (USDT/USDC), there are also stablecoins that use algorithms such as DAI and UST.

▶Cryptocurrency Glossary

Profit of 90 billion yen or more in 4Q

In addition, the percentage of commercial paper remained at zero, while the percentage of assets allocated to safer US Treasury securities rose to an all-time high of over 58%.

Commercial paper is an unsecured promissory note issued by a company to raise funds in the short term. In response to concerns about the amount Tether held as a reserve, such as the fact that the contracted company was unknown, the company gradually reduced this amount. In October 2022, the commercial paper was completely removed from reserves.

Tether reportedly redeemed more than ¥2.8 trillion ($21 billion) last year, generating a profit of more than ¥92.2 billion ($700 million) in the fourth quarter (October-December). Paolo Ardoino, the company’s chief technology officer, explained:

We were able to smoothly redeem more than $21 billion in crypto assets (virtual currency) market turmoil in 2022. In addition, it has issued over $10 billion USDT and continues to grow.

The fourth quarter generated more than $700 million in profit and increased reserves.

We are proud that we continue to take steps to restore trust in the cryptocurrency industry.

Providing financial inclusion in emerging economies

In October 2022, Tether partnered with local businesses to make USDT available at more than 24,000 ATMs in Brazil. Two months later, stablecoins accounted for more than 50% of Brazilian Real trading volume at ATMs.

Tether explained in an article on its official website at the end of January that USDT could provide easy-to-access US dollar liquidity to countries facing problems such as fiat currency value volatility and lack of reliable payment methods. bottom. In addition to Brazil, he said, Argentina, Lebanon, Turkey, Myanmar and African countries are also providing financial access to people.

connection: Tether Makes USDT Available at Over 20,000 ATMs in Brazil

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