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Tether Excess Reserves Soar to New Heights as Stablecoin Gains Market Dominance

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In a recent quarterly assurance report published on May 10, leading stablecoin issuer Tether revealed that its excess reserves have reached an all-time high of $2.44 billion. This figure represents an increase of $1.48 billion for the first quarter of 2023. Additionally, Tether’s Consolidated Reserves Report disclosed that the company’s consolidated assets totaled $81.8 billion at the of the quarter.

A significant portion of Tether’s reserves is invested in U.S. Treasury Bills. The company is also working to reduce its dependence on pure bank deposits as a liquidity source, opting instead to utilize the Repo market for added protection and liquidity for its users.

Tether Pursuit of Transparency: A Stablecoin’s Commitment to Openness

Striving for increased transparency, Tether maintains that its reserves are “extremely liquid,” with the majority held in cash, cash equivalents, and 85% in “other short-term deposits.” The company has also lowered its exposure to secured loans from 8.7% to 6.5% and stated that gold and Bitcoin represent approximately 4% and 2% of total reserves, respectively. According to the report, all new token issuances were invested in U.S. Treasury bills or placed in overnight Report. 

Tether’s CTO, Paolo Ardoino, emphasized the company’s ongoing efforts to monitor the risk-adjusted return on all assets within its portfolio. He noted that further changes may occur as the overall economic environment and market cycle evolve, in line with their standard risk management processes.

In a related development, Circle CEO Jeremy Allaire reported that the company has adjusted its USDC reserves to avoid exposure to a potential U.S. debt default. Circle has opted for short-dated U.S. Treasuries to mitigate this risk. Allaire stated, “We don’t want to carry exposure through a potential breach of the ability of the U.S. government to pay its debts.”

Rise in USDT Market Share

Tether’s market share has expanded to 62%, boasting a circulating supply of 82 billion USDT at the time of writing. The USDT market capitalization has grown by 24% since the beginning of the year, while its competitors have experienced declines.

On May 10, New York state proposed legislation that would authorize fiat-collateralized stablecoins as a form of bail bonds, marking another significant development in the stablecoin market.

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