Tether, the issuer of the USDT stablecoin, reduced its bank deposits by 90% in the first quarter of 2023. The volume of funds placed in financial institutions was reduced from 5.3 to 0.481 billion dollars, which significantly reduced the risks of counterparties, the company noted. The remaining deposits were distributed among several banks.
Tether is the largest issuer of stablecoins in the crypto market. Centralized USDT, pegged to the US dollar, as of May 16, ranks third in the overall rating of cryptocurrencies with a capitalization of $ 82.85 billion.
Simultaneously with the reduction of deposits, the company increased the share of US Treasury bills to a new maximum of $53 billion, or 64% of its reserves. In combination with other assets, USDT is now 85% backed by cash, cash equivalents and short-term deposits that can be quickly sold for repayment.
In the first quarter, the company’s net profit amounted to $ 1.48 billion, and the number of excess reserves as of March 31 was at a record high of $2.44 billion. The total number of tokens in circulation increased by 20%, the capitalization of USDT increased from 66 to almost 83 billion dollars.
In May, Circle adjusted the composition of the USDC stablecoin reserves in favor of short-term US bonds. The company no longer holds Treasury bonds maturing after the beginning of June, as it does not want to bear risks due to “a potential violation of the ability of the US government to pay its debts.” USDC is the second largest centralized stablecoin on the crypto market, with a capitalization of $29.8 billion.