Tether, the dollar-pegged USDT (USDT) stablecoin administrator, reported record profits of $5.2 billion in the first half of 2024 and a larger stockpile of U.S. government bonds than ever before, according to an announcement on July 31. .
Tether’s U.S. Treasury portfolio is currently worth approximately $97.6 billion, according to the company. The increase in the company’s Treasury holdings reflects the continued adoption of the Tether (USDT) stablecoin, which Tether says is 1:1 with liquid USD-denominated assets. It is said to be backed up. This figure is based on attestation from BDO, an independent accounting firm.
Graph showing market share of tokenized treasury products for USDY and BUIDL. Source: Blue Chip
According to Binance, USDT’s market capitalization is approximately $114 billion, slightly less than Tether’s total reserves of more than $118 billion, Tether said.
Tether said its financial reserves are larger than the governments of all but 17 countries around the world, including Germany, the United Arab Emirates and Australia. It is also the third largest purchaser of three-month U.S. Treasuries after the United Kingdom and the Cayman Islands.
“Given the trajectory of USDt adoption,[Tether]could become #1 next year,” the company said.
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The announcement also announced that Tether’s consolidated net capital (total company assets minus debt) as of June 30 was $11.9 billion. Tether issued approximately $8.3 billion in the second quarter. USDT is issued and redeemed continuously.
Tether’s balance sheet allows the company to “not only continue to lead the stablecoin industry in stability and liquidity, but also leverage its expertise across a variety of sectors including artificial intelligence, biotechnology, and telecommunications. ” said Tether CEO Paolo Ardoino.
Tether said it reinvests a portion of its profits into adjacent industries such as sustainable energy, Bitcoin mining, data, AI infrastructure, peer-to-peer communication technology, neurotechnology, and education.
Stablecoins such as Tether and rival USD Coin (USDC) are rapidly gaining popularity, with total payment volume exceeding $4 trillion, surpassing Visa.
Combined with tokenized real-world assets, cryptocurrencies are emerging as a major source of demand for U.S. Treasuries. Research strategist Tom Wang believes the tokenized U.S. Treasury market will reach $3 billion by the end of 2024.
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