Stablecoin issuer Tether has reported a $700 million profit in the quarter ending December 31, it said in a statement on Thursday. It has also reported a complete exit from the commercial paper market (unsecured, short-term debt instrument issued by corporations), attributing the decision to the volatile nature of the market and the potential for losses.
Tether’s profitability comes from the revenue generated by issuing digital currency and its associated services. In its statement, Tether said that it had exited the commercial paper market and was now fully funded with cash reserves. The company said that it had achieved a $700 million profit by leveraging its cash reserves.
“Last quarter, Tether generated over $700 million in profits, adding to its reserves. We are proud of how Tether has continued to be a driving force in rebuilding trust within the crypto industry and we are determined to continue to set a positive example for our peers and competitors alike,” Tether’s CTO Paolo Ardoino said in the statement.
The company took steps to ensure the stability of its currency, including investing in more liquid assets, diversifying its investments across multiple asset classes, and utilizing its cash reserves to offset potential losses, the statement said.
“This latest report demonstrates its [Tether’s] commitment to transparency and highlights a $300 million reduction in secured loans, more than $700 million net profit added to Tether reserves in the last quarter 2022, and the highest percentage to date of assets allocated in US Treasury Bills, with direct exposure of over 58%,” the company said.