Cryptocurrency firm Tether says that it has $1.6 billion U.S. of cash available to help support its USDT stablecoin.
The company forecasts that it will earn $700 million U.S. in profit this quarter, which should bolster its cash reserves to about $1.6 billion U.S.
Tether issues the USDT stablecoin that is pegged one-to-one with the U.S. dollar. USDT is backed by real-world assets such as fiat currency and U.S. Treasuries so that it is always redeemable for the U.S. currency.
Stablecoins are also employed by traders and investors to move in and out of different cryptocurrencies.
Stablecoin issuers such as Tether are frequently criticized for not being transparent about the type of assets they hold in reserve to support their digital currencies.
The U.S. Securities and Exchange Commission (SEC) has been cracking down on stablecoins this year, labeling them as “unregistered securities.”
Tether regularly issues attestations, which are reports produced by an auditor that attest to the company’s cash reserves and the assets it holds to support is stablecoin.
The last attestation that Tether released covering the fourth quarter of 2022 showed that the company had more assets than liabilities.
The value of the USDT stablecoin in circulation has grown to $78 billion from $70 billion since March 1 of this year as the entire cryptocurrency sector rallies.
The gains in the cryptocurrency sector have accelerated in recent weeks following the failures of traditional banks in the U.S. and Europe.
