Tether CEO confirms the USDT stablecoin is 104% backed, emphasizing the company’s focus on maintaining strong reserves for security.
Tether holds $97 billion in U.S. Treasury bills, partnering with Cantor Fitzgerald to ensure large redemption events can be handled efficiently.
The company has faced criticism for its lack of transparency but now provides quarterly reports and daily updates on its reserves.
Tether’s CEO Paolo Ardoino recently confirmed that the USDT stablecoin is backed by 104% reserves. This over-collateralization ensures that the value of collateral held by the company exceeds the total supply of USDT. Ardoino emphasized that ensuring the stablecoin’s safety remains the company’s "highest priority." According to CoinGecko, Tether’s USDT has a market cap nearing $120 billion.
Tether’s Treasury Holdings and Partnerships
Tether holds $97 billion in U.S. Treasury bonds as part of its effort to maintain liquidity. The company has formed a key partnership with Cantor Fitzgerald, a financial firm connected to the Federal Reserve. This partnership allows Tether to process large redemptions smoothly. According to Ardoino, Cantor Fitzgerald oversees these assets to ensure their reliability.
Despite Tether’s assurances, it has faced controversy over its transparency and lack of full audits. The company was fined $41 million by the CFTC in 2021 for misleading statements about its reserves. Additionally, past investigations revealed that Tether’s sister company, Bitfinex, used its reserves to cover financial shortfalls. These revelations have fueled skepticism around the company’s reserve claims.
Increased Transparency Efforts
To address these concerns, Tether now publishes quarterly attestations about its reserves, overseen by the Italian branch of auditor BDO. These reports aim to provide more insight into the company’s holdings. As of August 1, Tether reported $118.4 billion in reserves and $5.3 billion in excess collateral. Moreover, Tether also publishes daily updates on its website.
Investments in Emerging Technologies
Beyond stablecoin management, Tether is diversifying into emerging technologies, including AI infrastructure. Ardoino believes that AI infrastructure is becoming monopolized, and Tether aims to offer independent alternatives. The company is also investing in startups such as Bitdeer, a bitcoin mining company, and Blackrock Neurotech, a firm developing brain chip technology for neurological disorders.
Tether recently faced public scrutiny through a multimillion-dollar ad campaign led by Consumers Research. The campaign accused Tether of corruption, featuring billboards and TV ads. Ardoino acknowledged the company’s failure to address concerns earlier, noting that Tether only established a public relations team in 2022.
