Stablecoin

Strong

Northern

Stablecoin issuer Tether has resumed offering new loans denominated in USDT to its clients, marking a reversal of its earlier decision to discontinue collateralized loans in 2023. 
The revelation comes from Tether’s latest quarterly financial update, which shows an increase in USDT-denominated loans. As of June 30, the report indicated assets that included $5.5 billion in loans, up from $5.3 billion in the previous quarter. 
Tether spokesperson Alex Welch confirmed the extension of new loans during the second quarter of 2023. 
According to Welch, Tether’s decision to provide loans was primarily driven by two reasons. Firstly, to prevent any depletion of customer liquidity, ensuring that clients could continue their operations without facing liquidity constraints. Secondly, it aimed to assist clients in avoiding the need to sell their collateral at potentially unfavorable prices. 
This move by Tether contradicts its announcement late last year. In December 2022, the company had stated its intention to reduce secured loans in USDT reserves to zero throughout 2023, following the collapse of the crypto exchange FTX. This decision was made to restore trust in the market. 
In response to the report about its decision to resume stablecoin lending activities, Tether defended its actions in a separate blog post. The company argued that traditional financial institutions were failing to meet customer requirements in a manner that could harm the economy and criticized the Wall Street Journal for not examining this further. 
Tether emphasized that it had accumulated more than $3.3 billion in excess reserves, effectively offsetting secured loans and retaining profits within its balance sheet. The company remains committed to removing secured loans from its reserves. 
It is worth noting that Tether projected a substantial yearly profit of $4 billion, asserting that this profitability and its substantial reserves were mitigating the impact of secured loans, allowing it to maintain a healthy balance sheet. 
In a separate development, Tether announced a strategic investment in Northern Data Group, a Germany-based provider of data center and cloud environment services. 
Through this partnership, the two companies will collaborate on artificial intelligence (AI), communication, and data storage initiatives, expanding Tether’s reach beyond the fintech sector. 
The post <a rel="nofollow" href="https://www.unlock-bc.com/108798/tether-reverses-2023-decision-returns-to-usdt-loans-with-strong-excess-reserves/">Tether Reverses 2023 Decision, Returns to USDT Loans with Strong Excess Reserves</a> appeared first on <a rel="nofollow" href="https://www.unlock-bc.com">UNLOCK Blockchain</a>.

Tether Reverses 2023 Decision, Returns to USDT Loans with Strong Excess Reserves

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