In a new attestation report released by accounting firm BDO, it has been revealed that stablecoin issuer Tether’s reserves contained approximately 86% cash and cash equivalents as of September 30. This marks the highest percentage of cash and cash equivalents ever seen in Tether’s reserves.
The report further breaks down the composition of Tether’s reserves. It states that $56.6 billion worth of reserves are held in U.S. Treasury bills with a maturity date of less than 90 days. Additionally, another $8.8 billion was held in reverse repurchase agreements involving these bills. Furthermore, there was $8.2 billion in U.S. Money Market funds pegged to $1 per note and $292 million in cash and bank deposits. Tether also holds $65 million in the form of treasury bills from countries other than the U.S. The total amount of cash and cash equivalents in Tether’s reserves is approximately $74 billion, which accounts for 85.73% of its total reserves of $86.4 billion.
The report also highlights a decline in Tether’s reliance on secured loans as a means of raising revenue. The previous report showed that secured loans made up $5.1 billion of USDT reserves, whereas the current report states that it now stands at $336 million less. Tether had previously faced criticism for continuing to make secured loans despite announcing plans to wind them down.
In a blog post accompanying the report, Tether announced its plans to further reduce loans by the end of October 31. It aims to wind down an additional $1.1 billion in loans, leaving only $900 million in loans as part of its reserves.
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BDO publishes attestations of Tether’s reserves every quarter with a one-month lag between the end of the quarter and the publication. Tether has also stated that it is working on implementing a system to provide real-time audit reports in 2024.
The release of this report comes at a time when Tether has been under scrutiny from regulators and skeptics alike. Critics have questioned the transparency and backing of Tether, with concerns about whether all USDT tokens are sufficiently backed by USD reserves. Tether has repeatedly stated that each USDT token is fully backed by reserves, and the latest report seems to support this claim.
Tether is one of the most widely used stablecoins in the cryptocurrency market. It is designed to maintain a stable value by pegging each token to a reserve currency, usually the U.S. dollar. This stability makes stablecoins like Tether attractive for traders and investors who want to hold their assets in a cryptocurrency without the volatility associated with other digital assets like Bitcoin.
As the adoption of cryptocurrencies continues to grow, stablecoins play a crucial role in providing stability and liquidity within the crypto ecosystem. Tether’s high percentage of cash and cash equivalents in its reserves, as revealed in the BDO report, adds to the confidence in the stability of the stablecoin.
Looking ahead, Tether aims to continue reducing its reliance on secured loans and increase transparency through real-time audit reports. These efforts will likely contribute to building trust and improving the perception of Tether within the cryptocurrency community and regulatory circles.
