Tether Made $13 Billion in Profit Last Year, the Stablecoin Issuer Disclosed

Tether Holdings Ltd., the stablecoin issuer that was pulled into the spotlight this week during the confirmation hearing for Donald Trump's pick

Stablecoin issuer Tether Holdings Ltd. said Friday that it made an eye-popping $13 billion in profits last year.

The disclosure comes as the Commerce Department nominee, who is the head of Cantor Fitzgerald LP, said that stablecoins should be audited. Cantor serves as a key banking partner for the world's largest issuer of stablecoins.

During the hearing, Howard Lutnick disclosed that Cantor Fitzgerald has a convertible bond with Tether, and he said that stablecoins denominated in dollars should be audited.

Closely-held Tether doesn't release audited financial statements, a practice that has drawn criticism over transparency from crypto market observers and regulators over the years.

The firm, however, releases quarterly information as part of a third-party attestation by BDO. The attestations are limited to a snapshot in time and do not allow full access to a company's books.

The quality of assets backing stablecoins like Tether's USDT token has come under intense scrutiny in recent years, as regulators grew concerned about the liquidity of operators' reserves and if they could withstand mass redemption requests while under market pressure.

The stablecoin issuer said in a statement that it has more than $7 billion in excess reserves after issuing $23 billion in USDT in the three months ended Dec. 31.

The market value of Tether's USDT token in circulation has climbed to above $143 billion, as demand for stablecoins continued to go up during the crypto bull market.

Stablecoins are a type of cryptocurrency that typically aim to keep a one-to-one value with fiat currencies such as the dollar. They are usually backed by cash and cash equivalents.

Tether said it added more exposure to Treasuries in the last quarter, with its total direct and indirect holdings of the Treasuries having reached $113 billion. Most of the reserves backing its stablecoins are deposited in Treasury bills overseen by Cantor, from which Tether earns profits on the interest paid.

The firm also disclosed in the report that it moved its corporate entity to El Salvador in January, and Tether International S.A. De C.V. became the sole issuer of USDT.