Stablecoin issuer Tether on Wednesday reported a "record" net profit of $5.2 billion in the first half of the year, and the market capitalization of its flagship cryptocurrency (USDT) surged to an all-time high. The company said it generated net operating profit of $1.3 billion in the second quarter of this year. A portion of the profits is reinvested in "strategic projects".
The company’s stablecoin issuers, Tether International Limited and Tether Limited, disclosed that their asset reserves stood at $118.4 billion as of June 30, while liabilities stood at $113.1 billion, according to the latest quarterly certification signed by accounting firm BDO Italy. This means that the excess reserves backing the Tether stablecoin are $5.3 billion.
The company said its holdings of U.S. debt amounted to $97.6 billion, ranking it 18th among countries, surpassing Germany, the United Arab Emirates and Australia.
Tether Investments is a separate entity from the stablecoin business that manages the company’s growing operations in Bitcoin (BTC) mining, artificial intelligence, and other investments.
Tether’s USDT is a key infrastructure for cryptocurrency market trading, and it is increasingly in demand in developing countries as a tool to obtain U.S. dollars. It is the most popular stablecoin, with a market capitalization of $114 billion, up from $91 billion this year, according to CoinGecko.
Tether has been under the spotlight for years because of its perceived opacity of reserves. Howard Lutnick, chairman and CEO of Cantor Fitzgerald, a Wall Street investment bank that manages some of Tether’s assets, said Tether actually has the capital to back its stablecoin.