In his last attestation report for Tether, BDO Italia reveals that at the end of the first quarter, the stablecoin issuer’s reserves were around $1.5 billion in bitcoins, roughly 2% of its total reserves. Yet, in its previous reports, the accounting firm did not mention bitcoin as a category of Tether’s reserves.
But in this new report, we can see that the precious metals now have a section. Thus, it appears that precious metals represent $3.4 billion, or about 4% of Tether’s total reserves.
In a press release that accompanies this report, Tether specifies that it has added information on its bitcoin holdings and precious metals. This information is intended to make the issuer of the USDT stablecoin more transparent to its users.
In its press release, the USDT issuer states:
“For the first time, the CRR [Consolidated Reserves Report] contains new categories intended to increase transparency in reporting Tether reserves. Physical gold, Overnight Repo, corporate bonds and BTC holdings were reported separately.”
According to the statement, Tether has cleared $1.48 billion in profits during the first quarter and the circulation of its token increased by 20%. Thanks to this increase, Tether’s total reserves have reached their highest level, around $81.8 billion.
The new growth of stablecoin Tether could be partly explained by the decline of its biggest competitor, Circle’s USD Coin. Indeed, in March, the USDC briefly depreciated in the secondary market. This is due to concerns over USDC’s exposure to the failed Silicon Valley Bank.
Even though the crypto quickly regained its value, its market capitalization has been steadily declining since then. Circle CEO Jeremy Allaire awarded THE recent USDC decline to an alleged crackdown on cryptocurrency by US authorities.
Stablecoins: latest tools to counter CBDCs?
CBDCs raise many concerns about privacy and individual freedoms. In order to overcome these risks, stablecoins appear to be the preferred tools.
So even though stablecoins and central bank digital currencies (CBDCs) appear as two sides of the same reality when it comes to providing stable value. However, the stablecoins are able to provide entirely different use cases that CBDCs simply cannot match.
Thus, in order to be able thwart CBDCs and the effects of the financial crisis, we must think about programming stablecoins. This requires smart contracts that can automate and add new functionality to money.
Indeed, thanks to programmability, it is possible to foster both the crypto market and decentralization, which CBDCs cannot yet provide at present. Therefore, developers should take advantage of the possibilities offered by stablecoins such as USDT.
According to stablecoin issuersthe current monetary system can be improved at three levels:
- To begin with, stablecoins help reduce the costs of traditional financial transactions. This is the case with decentralized borrowing and lending through decentralized finance (DeFi) and remittances made by migrant workers.
- In a second time, stablecoins can be used for income protection and payment stabilization in countries plagued by hyperinflation, as is the case with the reserve protocol in Venezuela.
- In a third time, stablecoins are used for more confidential payment transactionsas is the case with MobileCoin (MOB).