Tether Adds Bitcoin And Gold Reserves, Reduces 90% Of Bank Deposits

Key Points:

• Tether reduces bank deposits by over 90% and adds gold and bitcoin to reserves, improving its stability and reducing counterparty risk.
• Tether’s record net profits and all-time high US Treasury holdings further solidify its position as a fully reserved stablecoin, providing users with added confidence.

Tether drops bank deposits by 90% and adds gold and bitcoin to reserves. Record net profits, US treasury holdings at all-time highs. Stable, fully reserved.

Tether has significantly changed its reserve strategy in the first quarter of 2023. The stablecoin reduced its bank deposits from $5.3 billion to $481 million, reducing Tether’s exposure to counterparty risk. This move was made as Tether’s competitors struggled with overexposure to bank deposits.

Tether’s bank deposits are spread over different banks, reducing the risk of bank failures. The company has added gold and bitcoin to its asset reserves for the first time, accounting for 4% and 1.8% of its total reserves, respectively. These changes are part of Tether’s commitment to transparency and stability.

Tether’s commitment to stability is also evident in its record net profits of $1.48 billion in Q1, which brought its reserves surplus to another record high of $2.44 billion. The company achieved these milestones while running a fully reserved stablecoin firm, unlike banks that use fractional reserves to boost profits. Tether can easily absorb any volatility, giving users added confidence.

Tether’s continued commitment to reducing secured loans indicates its focus on stability. The company has reduced secured loans in net and as a percentage of its reserves from 8.7% to 6.5%. Tether’s efficiency in margin calls and over-collateralization have prevented any losses on its loans, even during periods of industry crisis and high volatility.

Tether’s US Treasury holdings have reached an all-time high of over $53 billion, representing more than 64% of its total reserves. These treasuries and other reserves included in the Cash and Cash Equivalent category provide Tether with high-quality, liquid collateral that can be sold rapidly to process redemptions. Decade-high yield rates drive revenues up, increasing Tether’s surplus reserves and effectively overcollateralizing USD₮.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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