Tether chief technical officer Paolo Ardoino stated at Paris blockchain Week 2023 that the cryptocurrency company, which is the issuer of stablecoin, intends to achieve a $700 million profit in the first quarter of 2023, matching the profits of the last quarter of 2022.
The announcement comes as Tether’s market domination continues to grow, with USDT’s market value increasing by roughly $8 billion since February 28. According to data from CoinGecko, USDT’s market value as of this writing is $79 billion, which is the highest level since May 2022.
Tether significantly reduced its commercial paper backing last year and eventually eliminated it by the end of 2022. Tether was substituting US government bills for the commercial paper that had been taken out of its reserves.
The earnings of this quarter will probably match that of the final quarter of 2022, according to Ardoino who also noted that Tether made $700 million in profits during that quarter. Thus, our business equity will increase to $1.5 billion or $1.7 billion, on top of the reserves we now have supporting 100% of our assets he stated
Tether CTO on USDT
The Tether executive continued by claiming that because the company differs from banks based on the fractional reserve model, USDT is quickly evolving into the “safest asset to hold in the world.” He specifically made reference to the ongoing financial crisis affecting the US, where institutions like Silicon Valley Bank (SVB) have collapsed as a result of issues with the fractional reserve concept.
Furthermore, Arduino stated that he supports the primary cryptocurrency Bitcoin, which serves as Tether’s insurance, by saying they invest in Bitcoin because they don’t trust those guys to take such a big risk with consumer deposits.
As USDT’s market share has increased, USD Coin, a competing stablecoin from Circle, has seen its market share decline, with an 18% decline in market value since late February.
Due to its exposure to SVB’s demise, Circle has experienced significant problems, with the USDC stablecoin suddenly losing its 1:1 peg with the US dollar. Once Circle announced Cross River as a new financial partner and strengthened ties with BNY Mellon, the stablecoin was re-pegged.
