Tether Reports $2.85B Q4 Profit, $6.2B for 2023, BDO-Audited

Tether, the world’s largest stablecoin issuer, has released its 2023 Q4 financial report, audited by BDO, a globally renowned independent auditing firm. The report shows that Tether achieved a net profit of $2.85 billion in the fourth quarter, and a full-year net profit of $6.2 billion in 2023. The report also reveals that Tether has increased its excess reserves by $2.2 billion to total $5.4 billion, and has $80.3 billion exposure to U.S. Treasuries.

Tether’s net profit in the fourth quarter was mainly driven by the interest income from U.S. Treasuries, and the appreciation of Gold and Bitcoin reserves. The excess reserves, which represent the undistributed accumulated profits, increased by $2.2 billion in the quarter, reaching an all-time high of $5.4 billion. Tether stated that it has used part of the excess reserves to cover the outstanding secured loans, which are collateralized by highly liquid assets. This means that Tether has removed the risk of secured loans from the token reserves, addressing the community’s past concerns about this part of the portfolio.

Tether also invested $640 million in various strategic projects, such as mining, AI infrastructure, P2P telecommunications and others. These investments are confirmed to remain outside of the consolidated reserves report within a new segregated VC umbrella, so that they do not affect the token reserves.

Tether’s net profit for 2023 was $6.2 billion, of which ~$4 billion was generated by the net operating profits from U.S. Treasuries, Reverse Repo and Money market funds. The rest was generated by the performance of other asset classes, such as Gold, Bitcoin, and other investments. Tether also achieved new record highs in both direct and indirect ownership of U.S. Treasuries, with $80.3 billion exposure.

Tether issued tokens backed by Cash and Cash Equivalent at an impressive 90%, emphasizing its dedication to maintaining liquidity within the stablecoin ecosystem. The Consolidated Reserves Report (CRR) reiterates Tether’s strong financial position, with consolidated assets surpassing consolidated liabilities. The Management of the Company asserts that the Group’s consolidated total assets amount to at least $97 billion, and the Group’s consolidated total liabilities amount to $91.6 billion, of which $91.6 billion relate to digital tokens issued. The Group’s consolidated assets exceed its consolidated liabilities.

Tether Group is not considering a part of its reserves backing the issued token the investments made into sustainable energy, Bitcoin mining, data, AI infrastructure, P2P telecommunications technology and other long term proprietary investments. During Q4 2023, investments made into these fields reached $642 million ($1.45 billion since the beginning of the year).

Paolo Ardoino, CEO of Tether, stated, “Our Q4 attestation demonstrates our adherence to transparency, stability, and sound financial management. We are proud to have the highest proportion of reserves in Cash and Cash Equivalents, which shows our focus on liquidity and stability. Our impressive net profits of $6.2 billion for the whole year, including the last quarter, highlight our financial robustness. Moreover, our investments in green energy, Bitcoin mining, data, AI infrastructure, and P2P telecommunications technology reveal our dedication to a more sustainable and inclusive financial future.”

Tether’s 2023 Q4 financial report demonstrates the company’s robust profitability, transparency, and stability, as well as its commitment to innovation and sustainability. Tether is the leading stablecoin in the market, with a market capitalization of over $91 billion, and a daily trading volume of over $100 billion.

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