Tetherthe market’s largest stablecoin issuer by market capitalization, said it expects to invest 15% of its net profits in Bitcoin to strengthen its reserves.
Tether said the move should help “strengthen and diversify” the reserves of its stablecoin pegged at $1, in a statement released Wednesday.
“Our investment in Bitcoin is not only a way to improve our portfolio performance, but it’s also a way for us to align with a transformative technology that has the potential to reshape the way we do business. and live our lives,” said Paolo Ardoinochief technology officer of Tether.
Tether said that investing in Bitcoin “highlights the company’s confidence in the crypto market”.
Bitcoin hit a price high of nearly $69,000 in November 2021, but has since fallen to just under $27,000 as of late Wednesday.
The financial situation of Tether
Tether’s market cap is valued at nearly $83 billion, followed by USD Coin and Binance USD, according to CoinMarketCap.
Tether has reached a record net profit of $1.48 billion in the first quarterwhich brought its total excess reserves to $2.44 billion, according to the company’s latest attestation report.
“Tether is committed to navigating the ever-changing macro landscape for its users, who have trusted Tether for nine years to provide the most trusted stablecoin on the market,” the company said earlier this week.
Stablecoin legislation on the horizon?
US lawmakers are scrambling to put in place regulation around stablecoins, by imposing reserve requirements and banning algorithmic stablecoins.
Lawmakers seem confident that a stablecoin bill would be easier to pass, compared to other laws aimed at regulating the crypto industry.
Regulators’ efforts nearly paid off late last year when the former House Financial Services Speaker, Maxine WatersD-California, and Patrick T. McHenryRN.C, worked together on a bill with the Treasury Department and the Federal Reserve, without achieving a satisfactory result.
The House Financial Services Committee will meet Thursday in a hearing titled “Putting the ‘Stable’ in ‘Stablecoins:’ How Legislation Will Help Stablecoins Achieve Their Promise.”
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