Cryptocurrency firm Tether has announced that it is estimating a $700 million profit in the first quarter of 2023. This would bring the company’s excess reserves to over $1 billion for the first time in its history, Paolo Ardoino, Tether’s chief technology officer says to CNBC.

Tether is the issuer of the USDT stablecoin, which is pegged one-to-one with the U.S. dollar. Stablecoins like USDT are used by traders to move in and out of different cryptocurrencies without the need to convert money back into fiat currencies.

Over the years, stablecoin issuers have been criticized for not being transparent enough with the type of assets they hold in their reserve to back their digital currency. Tether has come under scrutiny in the past for holding commercial paper, or short-term, unsecured debt that is issued by companies, but without revealing the type of firms or geographical location of companies it had brought the debt from.

However, Tether eventually sold all of its commercial holdings and moved into U.S. Treasurys, which are considered a more stable and reliable asset. The company produces so-called attestations, which are reports produced by an auditor to attest to the company’s reserves and the assets it holds.

The last report Tether released covering the December quarter showed it had more assets than liabilities, and in February the company announced that it made $700 million in profit in the December quarter.

Tether’s chief technology officer, Paolo Ardoino, has said that the company expects to increase its excess reserves by another $700 million in the current quarter, which is not yet over. This would take Tether’s excess reserves to $1.66 billion and would mark the first time that the company crosses the $1 billion mark.

Tether generates revenue through various fees, such as a $1,000 withdrawal fee (with a minimum withdrawal requirement amount of $100,000), from investments in digital tokens and precious metals, and from issuing loans to other institutions.

The announcement of Tether’s expected profits and increased excess reserves will likely generate interest in the stablecoin market, particularly as the company continues to improve its transparency and reliability.

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This article was republished from azcoinnews.com