ether, the biggest stablecoin issuer, announced its record net profit for the third quarter of 2024 was $2.5 billion. The record pushed the year-to-date earnings for the company to an impressive $7.7 billion, according to its latest financial report.
However, despite these financial successes, Tether remains under increasing pressure from US regulators as dramatic changes occur in how the cryptocurrency is used worldwide.
Financial Performance and Treasury Holdings
In an October 31st report, Tether announced that its total assets had reached an all-time high of $134.4 billion, backed by significant investment in US Treasury securities. The firm said more than 50% of its quarterly profit came from its US debt exposure as it realized $1.3 billion from treasury holdings and another $1.1 billion from its gold investments, which have surged on the back of rising prices.
At approximately $120 billion in circulation, the USDT token of Tether demonstrates increased adoption of this stablecoin in the cryptocurrency market. The equity in the firm is at $14.2 billion, indicating how healthy the financial state of the company is at this point.
Interestingly, Tether bought $4.9 billion worth of US Treasury notes during Q3, a number significantly higher than the previous quarter, where the company held $97.6 billion in US debt. This places Tether in 18th position for having the largest exposures to US debts.
Usage Patterns Shifts
While the financial metrics of Tether continued to head for the skies, a study conducted by Chainalysis showed that USDT’s geographical usage had shifted considerably.
According to the data, the pace at which USDT turnover took place gained momentum in the European, Middle Eastern, and African (EMEA) time zones, falling between 9 am and 2 pm UTC. This evolution indeed hinted at the favouritism of USDT as one moved toward the west, pointing at cities like Moscow, Tehran, and Istanbul.
Usage has grown in tandem with the rising demand for USDT in markets that have relatively poor access to traditional banking systems-most notably, sanctioned countries like Russia and Iran.
According to Tether CEO Paolo Ardoino, the company now has 330 million unique on-chain wallets, excluding centralized exchange transactions. Such wide-ranging adoption presages a possible evolution in the use of stablecoins for both payments and value preservation across many global markets.
Regulatory Scrutiny
Despite Tether's stellar financial performance, it is constantly at the receiving end of intense scrutiny from US regulators. Reports suggest investigations into alleged sanctions violations and anti-money laundering legislation related to the stablecoin have taken place.
It is reported that federal prosecutors research the activities of Tether, specifically about its allegedly being used by militant groups and arms dealers.
The only thing that Tether has done so far is reassure people that it is committed to compliance and has been engaging with law enforcement agencies to prevent its tokens from being misused. The company told investors it is not aware of any investigations against its operations.
As such challenges beset Tether, how well it will steer through the waters of transparency and compliance remains central to its viability in an emerging ecosystem of digital currencies and their regulatory frameworks.
