Financial services company and issuer of USDT stablecoin Tether expects to generate $700 million in profit in the first quarter (Q1) of 2023, ending March 31, CNBC reported Friday.
According to the report, the company’s chief technology officer Paolo Ardoino said Tether estimates that its excess reserves will cross the $1 billion mark this quarter, which has not ended.
Ardoino Claims USDT Is the Safest Asset in the World
The crypto-focused firm previously generated $700 million in the last quarter of 2022 and is hoping to match the profits this year to increase its excess reserves to more than $1.66 billion for the first time.
Ardoino revealed the company’s financial expectations while defending Tether’s record at Paris Blockchain Week 2023, noting that USDT is the “safest asset in the world to hold.”
”Tether is making money, and banks are failing. So if you have to put money somewhere, I guess that Tether is the most safe among all the choices,” Ardoino said.
He also claimed that the financial services firm has a better structure based on a fractional reserve model than banks like Silicon Valley Bank, which collapsed earlier this month due to problems arising from its fractional reserve model.
The Tether CTO also expressed his love for Bitcoin (BTC), noting that it’s a hedge against inflation. He also hinted that the company chose the crypto asset because of lack of trust in the traditional banking system, which takes risks on customer deposits.
Tether Reduced Its Commercial Paper to Zero
Tether is one of the top players in the industry, with various stablecoins pegged to different local currencies, including the United States dollar, European euro, Mexican peso, and the Chinese yuan used to facilitate cross-border payments.
Its stablecoin USDT reached a new market capitalization of $78 billion this month, surpassing other stables such as USDC, which depegged from its $1 benchmark due to the three bank failures in the U.S.
As one of the market leaders, Tether recently reduced its commercial papers, known as short-term unsecured debt, to zero, selling off the reserves issued by other companies to purchase U.S treasuries which are considered better assets in terms of stability and reliability.
The company periodically reveals the amount it holds on its reserves to increase transparency. The stablecoin issuer released one such report in October, revealing that it increased its treasury bonds to 58.1% in September.
