Tether: Tether has generated more than US $700 million in net profit

According to the report, Tether’s official document “Evolution of Tether Reserves” pointed out that in 2022, Tether will reduce the risk of commercial paper to zero, and there is no gap in the liquidity of USDT holders, and Tether has not shrunk. USDT now has more than 81% of cash and cash equivalents, including more than $39 billion of direct exposure to US treasury bond bonds, money market funds, reverse repurchase agreements, and cash and bank deposits. Tether said that although collateral was selected based on its conservative and liquidity nature, Tether’s reserves and operations had generated more than $700 million in net profits, which were added to Tether’s reserves, resulting in a total excess reserve of $960 million.

Interpretation of this information:

Tether, the stablecoin issuer, has released an official document titled “Evolution of Tether Reserves” outlining its plans to reduce the risk of commercial paper to zero by 2022. The report highlights the liquidity of USDT holders and reassures that they will not face any gaps. Additionally, Tether has not shrunk, with more than 81% of its assets being cash and cash equivalents. This includes $39 billion of direct exposure to US treasury bonds, money market funds, reverse repurchase agreements, cash, and bank deposits.

According to Tether, the collateral was selected based on its conservative nature and liquidity, resulting in $700 million net profits generated from Tether’s reserve and operation. The profits were added to Tether’s reserves, leading to a total excess reserve of $960 million.

One interpretation of this report is that Tether aims to address concerns over the high-risk nature of commercial paper, which has caused public suspicion of its reserves. The reassuring nature of the report may help improve investor confidence in Tether and increase its adoption across the crypto industry.

The “Evolution of Tether Reserves” document highlights three keywords to summarize its contents:

1. Liquidity: Tether emphasizes the liquidity of USDT holders and reassures that they will not face any gaps, demonstrating its commitment to maintaining a stable value for its token.

2. Conservative: Tether has selected collateral that is conservative and low-risk, reflecting its commitment to addressing concerns over the reserves’ high-risk nature.

3. Excess reserves: The report highlights Tether’s significant excess reserves, resulting from net profits generated from the reserves and operations. This emphasizes Tether’s commitment to maintaining a high level of security for its users.