Tether CTO Explains How The Company Earns On Its $ 5 Billion Reserves
Tether is one of the key players in the cryptocurrency ecosystem, and its stablecoin USDT ranks fifth among all market assets in terms of capitalization. USDT has a daily turnover of $ 50 billion, which is a quarter more than Bitcoin.
At the same time, it has always been one of the most obscure elements of this ecosystem. Thus, in the course of the proceedings with the New York prosecutor’s office, it was revealed that the company had provided $ 850 million from its reserves to the sister exchange Bitfinex as a loan. This, however, does not prevent USDT capitalization from constantly growing, reflecting the demand of market participants for the company’s instruments..
“This is a huge money engine. This is one of the reasons why USDT is our racehorse, “Paolo Ardoino, CTO of Tether and Bitfinex, told Decrypt..
He explained what the company’s commercial model is based on. “Tether’s profits are essentially cash assets and safe investments such as government bonds. It is quite understandable that with an interest rate of 3-3.5% per annum for a market capitalization of $ 4 billion or already $ 4.8 billion, a rather interesting amount is obtained, – he said. – Count yourself. More than $ 100 million “.
At the same time, Ardoino noted that only a small part of the company’s reserves are placed in such investments, while the remaining assets are stored in fiat currency..
“This is why competition has arisen. They are trying to grab a piece of the pie, “he added..
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