Tether (USDT) Hits Record $5.2B in Net Profits for H1 2024, Dominance Threatened by MiCA Framework

USDT issuer Tether disclosed net profits of $1.3 billion in the second quarter of the year, adding to the $4.5 billion generated in Q1 to set a new record.

Tether, the issuer of the world’s largest stablecoin, has disclosed net profits of $1.3 billion in the second quarter of the year, bringing the total net profits to $5.2 billion in the first half of 2024. This adds to the $4.5 billion in net profits generated in Q1, setting a new record for the company.

According to a press release from Tether on Monday, the company's profits were largely driven by its yield-bearing investments, which include U.S. Treasuries and reserves, as stated in the assurance opinions conducted by BDO. The digital payment giant also disclosed that it redeployed its balance sheet into investment pools for ventures such as Bitcoin (BTC) mining, peer-to-peer texting provider Keet, and decentralized artificial intelligence data centers.

BDO, an independent accounting firm, was tapped by the USDT issuer to bolster confidence in its operations. However, skeptics maintain that BDO-backed attestations are not a substitute for full reserve audits.

As part of a $18.5 million settlement with the New York Attorney General, Tether is now legally bound to provide regular financial reports. The company was found to have misled the public over USDT’s reserves and underlying assets.

Tether's market dominance under threat Despite being the clear number one, Tether's future in North America and Europe appears uncertain with the introduction of new regulations.

In the world of stablecoins, USDT reigns supreme, being the largest U.S. dollar-pegged stablecoin with a market cap of $114 billion. This dwarfs competitors like Circle's USD Coin (USDC).

While Tether reportedly has a strong presence in emerging markets like Central and Southern America, the stablecoin's future in Europe and North America seems less clear.

With the European Union introducing the Markets in Crypto Assets (MiCA) framework and the U.S. government preparing to introduce stablecoin regulations, other stablecoin issuers could be jockeying for market share.

In Europe, Circle was the first company out of the blocks, having secured the bloc's first stablecoin provider license. The firm is also planning to go public in America and become the first stablecoin issuer to do so on U.S. soil.

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