Tether's Cash Reserves Reach Record High, Secured Loans Decrease: BDO Report
Summary:
An attestation report from accounting firm BDO reveals that 86% of Tether's reserves were in cash and cash equivalents as of September's end. This figure marks the highest ever in Tether's reserves. The report shows a reduction in reliance on secured loans, with a further decrease anticipated. BDO publishes these attestations quarterly, and Tether aims to provide real-time audit reports starting 2024.
As per an inspection report by BDO, an accounting firm, Tether, the issuer of stablecoin, had around 86% of its reserves in cash and cash equivalents by the end of September. This represents the largest proportion of cash and cash equivalents ever constituted in Tether's reserves. The quarterly attestation report for Tether indicates that the part of reserves encompassing cash and equivalents reached an all-time high of 85.7%, amounting to almost $1B.
The report details that $56.6 billion of the reserves were in U.S. Treasury bills with a maturity of less than 90 days. An additional $8.8 billion was present in reverse repurchase agreements with these bills. Furthermore, there were $8.2 billion in U.S. Money Market funds with a value of $1 per share and $292 million held in cash and bank deposits. Also, $65 million were stored in the form of treasury bills from other countries. Overall, cash and equivalent assets totaled to around $74 billion, 85.73% of Tether’s total reserves worth $86.4 billion.
The report also indicates that Tether has substantially lessened its dependence on secured loans for generating income. The secured loans now represent only $5.1 billion of USDT reserves, which is about $336 million lower than what was reported previously. Tether faced criticism in September for its continued reliance on secured loans despite announcing plans to taper them.
In a related blog post, Tether predicted further reduction in loans by the end of October 31. An extra amount of $1.1 billion in loans are expected to be wound down by this date, leaving only $900 million in loans as part of reserves.
BDO regularly publishes attestations on Tether’s reserves quarterly, with a lag of one month between the quarter-end and the report's release. As per Tether, they are developing a system to provide live audit reports in 2024.
Published At
10/31/2023 6:00:00 PM
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