Tether Releases Q3/2023 Asset Report

Tether, the largest issuer of stablecoin USDT, has published its latest asset verification report on the evening of October 31, summarizing the Q3/2023 period.

According to the report, as of September 30, 2023, Tether holds assets totaling $86.3 billion, backing the 83.1 billion USDT in circulation.

However, as of October 31, the market capitalization of USDT reached $84.8 billion, its highest historical level. This milestone reinforces Tether's position as the largest stablecoin in the crypto market, with a market share exceeding 67%.

Market capitalization fluctuations of USDT in the past year. Source: CoinMarketCap (November 1, 2023)

Within the total $86.3 billion in assets held, the largest proportion remains in U.S. commercial paper (T-bills), valued at $56.6 billion, a slight increase from $55.8 billion in Q2. Additionally, the company engages with various financial instruments related to T-bills, bringing the total value to $72.6 billion.

From these T-bill investments, Tether reported approximately $1 billion in profit for Q3, similar to Q2's figures and slightly below Q1/2023's record $1.5 billion.

The company allocated $670 million for "development research," increasing the total expenditure for this purpose in 2023 to $800 million. Despite these expenses, Tether's surplus asset reserve remains around $3.2 billion.

Other notable changes include the cash and bank deposits reserves of Tether increasing from $90 million three months ago to $292 million.

Thus, the cash and cash equivalent reserves (including T-bills) now comprise 85.7% of Tether's reserve fund. According to new CEO Paolo Ardoino, this marks the highest such percentage in Tether's nine-year history.

Other asset categories such as corporate bonds, precious metal investments (gold), and Bitcoin have seen minimal fluctuations. However, the company noted a reduction in external loans by $330 million.

The significant price increases of Bitcoin and gold in October 2023 have not been reflected in this asset report. According to Ardoino, if the prices as of October 31 were considered, the amounts of BTC and gold held by the company would rise to $2.1 billion and $3.4 billion, respectively, expanding the surplus asset reserve to $4.3 billion.

Tether has had a relatively calm Q3/2023 compared to the tumultuous first half of the year, which saw various news impacting both positively and negatively on the company and USDT.

In addition to appointing long-time Chief Technology Officer Paolo Ardoino as CEO, Tether announced it would cease supporting USDT on three blockchains, namely Kusama, Omni (Bitcoin), and Bitcoin Cash, due to declining demand. However, the stablecoin development unit reaffirmed its commitment to developing the RGB Protocol to support smart contracts on Bitcoin, aiming to reintegrate USDT into the world's largest cryptocurrency network soon.

Regarding geopolitical matters, Tether disclosed its support for freezing addresses allegedly associated with organizations involved in conflicts in Israel and Ukraine. Nevertheless, the company continues to face allegations from U.S. authorities regarding support for terrorist financing.

Looking ahead to 2024, Tether declared its intention to provide real-time USDT reserve data, further enhancing transparency in its operations.