Thomas Daniels
Tether, the issuer of the widely-used stablecoin USDT, announced a significant financial milestone with net profits reaching $1.3 billion in Q2 2024, supplementing the $4.5 billion achieved in Q1. This culminates in a record-setting $5.2 billion profit for the first half of the year. The company’s quarterly attestation, conducted by the independent accounting firm BDO, attributes these profits primarily to yield-bearing investments such as U.S. Treasuries and reserves.
In addition to traditional investments, Tether has diversified its portfolio by channeling funds into innovative sectors. These include Bitcoin mining operations, the peer-to-peer texting service Keet, and decentralized artificial intelligence data centers. Despite BDO’s involvement, critics argue that attestations fall short of comprehensive reserve audits. This skepticism is underscored by the New York Attorney General’s mandate for Tether to provide regular financial disclosures following an $18.5 million settlement over allegations of misleading public information regarding USDT’s reserves.
As the largest U.S. dollar-pegged stablecoin, USDT commands a market capitalization of $114 billion, vastly outpacing competitors like Circle’s USD Coin (USDC). However, Tether’s dominance faces potential challenges with the European Union’s new Markets in Crypto Assets (MiCA) framework and impending stablecoin regulations in the United States. Circle has already secured the first stablecoin provider license in Europe and plans to become the first such issuer to go public in the U.S., positioning itself as a formidable competitor in the stablecoin market.
