Tether, issuer of USDT stablecoin, says its flagship digital asset is worth nearly $100 billion.
The company on Wednesday (Jan. 31) released earnings showing that it saw a “record-breaking” $2.85 billion in net profits for its most recent quarter.
“Tether’s Q4 attestation underscores our commitment to transparency, stability, and responsible financial management,” Paolo Ardoino, CEO of Tether, said on the company blog. “Achieving the highest percentage of reserves in Cash and Cash Equivalents reflects our dedication to liquidity and stability.”
As a report by Coindesk noted, USDT is the most popular stablecoin, with its market cap at an all-time high of $96 billion, having added over $10 billion since late October amid a revitalization of cryptocurrency trading.
Stablecoins are often seen as a bridge between the crypto and traditional financial systems, and have drawn interest from the White House and congressional lawmakers from both sides of the aisle. Proponents contend that federal regulation would add an air of legitimacy to the asset class and foster a wider adoption of crypto.
It has also led to increased lobbying efforts by crypto companies ahead of pending Congressional debate and the 2024 U.S. elections. Among the biggest contributors to these efforts was Coinbase, which spent $2 million, much of that focused on stablecoins. Tether spent $760,000 on lobbying in the first three quarters of 2023, double the amount spent the prior year.
The downside to stablecoins’ success is that these digital holdings have become a favorite of fraudsters, according to a recent report by blockchain analysis firm Chainalysis.
“Through 2021, bitcoin reigned supreme as the cryptocurrency of choice among cybercriminals, likely due to its high liquidity,” the report said. “But that’s changed over the last two years, with stablecoins now accounting for the majority of all illicit transaction volume. This change also comes alongside recent growth in stablecoins’ share of all crypto activity overall, including legitimate activity.”
The report estimated that stablecoins accounted for around 70% of scams connected to crypto transactions last year (even as the volumes dropped by more than 40% year over year), with a value of $40 billion as measured through the last two years.
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