Tether reports profit of $2.9 billion in Q4 attestation, with $5.4 billion in excess reserves

Quick Take

  • Stablecoin issuer Tether reported a record net profit of $2.9 billion in its Q4 2023 attestation report.
  • Tether also set an all-time high increase in excess reserves backing its tokens in circulation during the quarter, now totaling $5.4 billion.

Stablecoin issuer Tether USDT -0.05% reached a record $2.9 billion net profit in Q4 2023 and set an all-time high increase in excess reserves backing its tokens in circulation, according to its latest attestation report conducted by global auditing firm BDO.

Net operating profit was around $1 billion, primarily resulting from holdings of U.S. Treasuries, with the rest of the gains largely related to the appreciation in the value of Tether's bitcoin and gold reserves during the quarter.

The profit increased Tether's excess reserves by $2.2 billion to a total of $5.4 billion. The remainder was used to fund project investments, including mining, AI infrastructure and P2P communications, which it does not consider part of its reserves, the firm said.

BDO confirmed Tether's $4.8 billion in outstanding unsecured loans at year-end were fully covered by the excess reserves. Tether said it was proud to have removed the risk of secured loans from its token reserves.

"While such secured loans are widely overcollateralized, Tether accumulated enough excess reserves to cover the entirety of the exposure," the firm stated. "This is in response to the community's past expressed concerns about this part of the portfolio."

Tether's primary business is running the USDT stablecoin, which helped it generate a net profit of $6.2 billion for the year. 

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Tether buys more bitcoin

Tether also acquired an additional 8,888 bitcoins in Q4, increasing its total holdings to about 66,465 BTC -0.06% — currently worth around $2.8 billion — The Block reported earlier this month.

As of Dec. 31, the firm's consolidated reserves amounted to at least $97 billion, including $80.3 billion worth of U.S Treasuries and $3.5 billion of gold. Tether's consolidated liabilities relating to digital tokens issued stand at $91.6 billion, 90% backed by cash or cash equivalents.

"Tether’s Q4 attestation underscores our commitment to transparency, stability, and responsible financial management," Tether CEO Paolo Ardoino said.


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About Author

James Hunt is a reporter at The Block, based in the UK. As the writer behind The Daily newsletter, James also keeps you up to speed on the latest crypto news every weekday. Prior to joining The Block in 2022, James spent four years as a freelance writer in the industry, contributing to both publications and crypto project content. James’ coverage spans everything from Bitcoin and Ethereum to Layer 2 scaling solutions, avant-garde DeFi protocols, evolving DAO governance structures, trending NFTs and memecoins, regulatory landscapes, crypto company deals and the immersive metaverse. You can get in touch with James on Twitter or Telegram via @humanjets or email him at [email protected].

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