Tether Stablecoin Loans Rise In 2023
In spite of the company’s announcement that it will reduce such loans to zero in December 2022, Tether, the biggest stablecoin issuer in the cryptocurrency market, has seen an increase in its stablecoin lending, or secured loans, in 2023.
Tether stated in its most recent quarterly report that as of June 30, its assets comprised loans of $5.5 billion, up from $5.3 billion in the prior quarter. The recent increase in stablecoin lending, according to a Tether representative, was brought on by a few short-term loan requests from customers with whom the company has “cultivated longstanding relationships.” The corporation intends to reduce such loans to zero by 2024, the representative added.
Tether has increased its secured loans, allowing customers to borrow USDT in exchange for collateral. However, these loans have faced controversy due to lack of transparency between the collateral and borrowers. Tether reported $3.3 billion in surplus reserves in September, up from $250 million in 2022. In response, Tether defended the concerns about stablecoin loans, stating that the company’s $3.3 billion excess equity and potential $4 billion yearly profit make offsetting the loans and retaining profits within the balance sheet. Tether remains committed to removing the secured loans from its reserves.
(With inputs from Shikha Singh)
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