Tether Holdings has announced its intention to publish real-time data about its reserves in 2024. Paolo Ardoino, the newly promoted CEO, shared this upcoming feature in a recent interview with Bloomberg. Currently, the company updates its reserves data at least once a day and also releases monthly and quarterly reviews.
From regulatory fines to an upward trend
Tether’s transparency initiatives follow a period of scrutiny that led to a $42.5 million fine by The Commodity Futures Trading Commission (CFTC) in 2021. The fine was related to allegations that Tether’s USDT stablecoin wasn’t fully backed for a substantial duration between 2016 and 2018. However, the company has since rebounded significantly. As per Tether’s Q2 report, their assets have grown by 5.7% to $86.5 billion, marking a 30% increase in operational profits amounting to more than $1 billion.
A stronger position in a sluggish market
Although the cryptocurrency markets have seen some downturns this year, Tether’s performance has remained strong. Moreover, the company’s stablecoin lending activities have shown an upward trajectory, even after reducing such loans to zero in December 2022. The most recent attestation from accounting firm BDO reveals an additional $850 million in excess reserves, totaling $3.3 billion. Additionally, the company disclosed that it has $72 billion in indirect exposure to U.S. Treasuries through money market funds and overnight repo collateralization.
The commitment to real-time data publishing next year is seen as a significant step in the direction of transparency. Particularly, this move is expected to help Tether Holdings rebuild trust and extend its leadership in the stablecoin market. The transition from the current once-a-day updates to real-time will offer more accurate and immediate insights into the company’s financial health. This decision is also likely to influence other companies in the stablecoin sector to follow suit, thereby contributing to a more transparent environment in the industry.
Furthermore, the company’s Q2 performance metrics demonstrate a robust financial standing despite market volatility. In the face of previous allegations and regulatory fines, the ability to turn a significant profit and maintain strong reserves sends a clear message to both investors and regulators alike.
However, it should be noted that despite its growth and efforts to be more transparent, the stablecoin issuer still holds a substantial amount of indirect exposure to U.S. Treasuries. This remains an area that may draw attention from financial watchdogs in the future.