Cryptocurrency

Crypto Giant’s CTO On Impact Of Failing Banks By Benzinga


Benzinga – Stablecoin issuer Tether (CRYPTO: USDT) projects a Q1 profit of $700 million, pushing its aggregate surplus reserves beyond $1 billion, according to the firm’s CTO Paolo Ardoino.

Tether is responsible for issuing the USDT stablecoin, which maintains a one-to-one relationship with the U.S. dollar. USDT is backed by tangible assets such as fiat currencies and U.S. Treasury bonds, guaranteeing its constant exchangeability with the U.S. dollar.

Previously, Tether held commercial paper, a form of short-term, unsecured corporate debt, but did not provide information about the specific companies or their locations from which it acquired the debt.

Tether ultimately liquidated all its commercial paper holdings and moved to U.S. treasuries, widely regarded as more stable and dependable assets.

The company issues attestations, which are audit reports that verify the company’s reserves and the assets it possesses.

Tether’s latest attestation, which covered the December quarter, demonstrated that its assets exceeded its liabilities.

In February, Tether disclosed a $700 million profit for that quarter, with total assets fewer liabilities amounting to $960.6 million.

Also Read: Thwarting Crypto Villains: 4 Strategies To Outsmart Scammers, Protect Your Fortune

Tether’s CTO, told CNBC that the company expects its surplus reserves to increase by $700 million during the present quarter, which would elevate Tether’s excess reserves to $1.66 billion and mark the first occasion Tether exceeds the $1 billion mark.

Ardoino noted, “So this money stays in Tether in the main company in order to further capitalize the stablecoin.” Tether derives revenue from various sources, such as a $1,000 withdrawal fee (with a minimum withdrawal amount of $100,000), investments in digital tokens and precious metals, and issuing loans to other institutions.

The value of all USDT in circulation has grown significantly in recent weeks, from $70.98 billion on March 1 to $78.14 billion on Thursday, according to CoinMarketCap.

Ardoino shared Tether’s estimated profit for the ongoing quarter while defending the company’s track record. In response to questions about Tether’s ability to weather an event like the SVB crisis, Ardoino asked, “First of all, seriously after Credit Suisse and all the others, all the banks that are failing you are looking again at Tether?”

He referenced the instability at Credit Suisse (NYSE: CS), which ultimately led to a regulator-brokered $3.2 billion deal in which UBS Group AG (NYSE: UBS) acquired the Swiss bank.

Ardoino asserted, “Tether is making money and banks are failing. So if you have to put money somewhere, I guess that Tether is the most safe among all the choices.”


Get The App

Join the millions of people who stay on top of global financial markets with Investing.com.

Download Now

Read Next: FTX Set To Reclaim $460M From Bahamas-Based Hedge Fund In Settlement

© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

Read the original article on Benzinga



Source link

Leave a Response