Tether's Safety Cushion Nearly Doubles To $8B In A Single Quarter After $1.5B Profit In Third Quarter

CEO Paolo Ardoino said USDT's user base has topped 700 million, calling it "the biggest financial inclusion success story in the history of humanity."

• Tether's excess reserves nearly doubled to about $7.95 billion at the end of September, from $4.1 billion three months earlier, according to its BDO attestation.
• The stablecoin issuer earned $1.5 billion in net operating profit in the quarter, and $4.5 billion so far this year, mostly from US Treasury bills and repos.
• Its $132.4 billion in Treasury exposure is roughly on par with South Korea's holdings, while reserves also included $19.1 billion in gold and $8.4 billion in Bitcoin.

Tether's (USDT) excess reserves nearly doubled in the third quarter, as the issuer of the world's largest stablecoin earned $1.5 billion in profit, mostly from interest on U.S. government debt.

The company's reserves exceeded its liabilities by about $7.95 billion at the end of the September quarter, up from $4.1 billion at the end of June, according to its quarterly attestation, which accounting firm BDO prepared and Tether published on Friday. That buffer was the amount Tether held above what it needed to back every USDT token in circulation.

Tether made $1.5 billion in net operating profit in the third quarter, in line with the previous quarter. It has now earned $4.5 billion so far this year. Most of that came from US Treasury bills and reverse repurchase agreements, which were short-term loans backed by government securities. The profits came even though USDT's supply changed little. Issuance held at about $184 billion through the first three quarters of the year, despite shifts in the crypto market.

USDT’s price continued to trade flat at nearly $1 over the past 24 hours. On Stocktwits, the retail sentiment around USDT remained in the ‘bearish’ zone, while chatter around it shifted to ‘high’ from ‘normal’ over the past day.

What Backs USDT?

Tether held $191.5 billion in total reserves at quarter-end, against $183.5 billion in liabilities. Direct and indirect exposure to U.S. Treasury bills made up $132.4 billion. That exposure was roughly in alignment with South Korea's $134.2 billion in U.S. Treasury holdings and above the United Arab Emirates' (UAE) $116.1 billion, according to data from the U.S. Treasury Department.

The reserves also included over $19 billion in precious metals and roughly $8.4 billion in Bitcoin (BTC), valued at Bitcoin's September 30 closing price of $83,621. The rest included $14.2 billion in secured loans, $4.2 billion in public equities and $6 billion in other investments, the attestation showed.

On Reserves

"Our responsibility is to make sure USDT remains dependable when people need it most, including when markets and financial systems come under pressure," CEO Paolo Ardoino said. According to him, earning $1.5 billion in profit while holding "nearly $8.0 billion in excess reserves,” gave them a “strong foundation for that work."

On X, Ardoino said that USDT's user base had reached a record of more than 700 million people across emerging markets. He called the stablecoin "the biggest financial inclusion success story in the history of humanity."

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