Tether Reports Record $4.9 Billion Profit Amid Expansion Plans
Key Developments
Strong Profitability: Tether announced a substantial profit of $4.9 billion for the second quarter.
U.S.-Focused Initiative: CEO Paolo Ardoino suggested that a new venture by Tether will concentrate specifically on expanding within the U.S. financial landscape.
Compliance Concerns: Prior analyses have questioned Tether’s ability to comply with stricter U.S. regulations without altering its reserve backing.
Tether’s Reserves and Regulatory Landscape
A recent attestation confirmed Tether’s robust performance with $5.7 billion generated in the first half of the year, marking a 9.6% increase year-over-year.
The company emphasized its substantial reserves, strategically backing its stablecoin with $105 billion in U.S. Treasuries (64% of total), along with significant holdings of Bitcoin and precious metals.
Tether holds $127 billion in exposures to U.S. Treasuries, positioning it as one of the largest holders, comparable to the holdings of Saudi Arabia recently reported by the U.S. Treasury Department.
Despite its considerable treasury holdings, questions persist, especially following JPMorgan’s analysis suggesting Tether might need to sell Bitcoin to meet U.S. regulatory requirements.
Making the Case for Compliance
In its attestation, Tether framed its structure as demonstrating “how private innovation can align with public monetary goals,” facilitating secure access to dollar liquidity.
Currently, Tether leads the stablecoin issuer market in terms of market capitalization, with $163 billion compared to Circle’s $64 billion.
In an effort to deploy its significant liquidity, Tether has invested in various ventures beyond its core business, including Twenty One Capital (a Bitcoin treasury firm) and Rumble (an online video platform).
