What to know:
- Tether earned $1.5B and raised its buffer to $4.11B from Treasury yields.
- Physical gold holdings topped 146 tons, expanding beyond cash and bonds.
- As the top stablecoin, Tether’s stronger backing addresses demands as US and EU rules tighten.
Tether Holdings has announced a $1.5b net operating profit in the second quarter, as well as the increase of their reserve buffer to $4.11 billion and a rise in its physical gold holdings above 146 tons.
A stablecoin USDT issuer has released figures demonstrating that even under the scrutiny of regulations worldwide, there is a steady demand for tokens backed by the dollar.
Profitability and Reserve Strength
The Q2 operating profit came from the yield on US Treasury bills and other liquid assets used as backing for USDT. The company had to increase the excess reserves, that is, the reserves held above what is necessary to settle the circulation of tokens, to $4.11b.
Source: Seoul Daily
Besides this, it had also revealed that it owns physical gold that weighs over 145 tons, indicating they have moved beyond cash and government bonds for their assets diversification.
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Profitability Meets Tighter Regulation
Tether is the biggest stablecoin, which means it’s used by many different players in the market like centralized exchanges, DeFi protocols, and even corridors connecting emerging markets to the rest of the world. It basically is the liquidity that allows everything happening in those markets.
If reserves are strengthened, then it can satisfy a major concern that regulators and institutions have had for a long time: that the support given to tokens is enough to meet their demand.
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Reserves That Back Global Liquidity
For exchanges and payment firms, being profitably of Tether is a sign that their business is able to grow, support regulations, audits, and expanding product lines without just issuing new tokens.
Source: Corporate Finance Institute
The publication is a follow-up to both US and EU systems for the regulation of stablecoins, which are maturing, meaning that issuers tend to be exposed to higher disclosure and reserve requirements.
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