Tether, the issuer of the stablecoin USDT, published its consolidated reserve report for the second quarter of 2023 on Monday. The company showed consolidated assets of at least $86.5 billion against total liabilities of $83.2 billion. In the first quarter, Tether had consolidated total assets of $81.8 billion, mostly in US Treasury bills.

Tether’s Q2 reserve report showed that 85 percent of Tether’s reserves were in cash and cash equivalents.

$3.3 billion in excess reserves

Tether made a profit of $850 million in Q2, bringing its excess reserve assets to $3.3 billion.

The company said in a statement that the excess reserves are the company’s own profits. These profits are profits that have not been distributed to shareholders and are held extra on top of the 100 percent reserve that the company maintains to support all the tokens it has issued. In other words, Tether holds all of the company’s profits in reserve to support tokens. This is intended to ensure and secure the company’s liquidity.

The report shows that Tether’s direct and indirect investments in government bonds and short-term debt instruments totaled $72.5 billion. These investments take the form of directly owning US Treasury bonds and investing in short-term debt instruments through money market funds.

30 percent increase in operating profit

From April through June, the company earned more than $1 billion, a 30 percent increase in operating profit from the previous quarter.

The company also announced a $115 million share buyback and other investments in energy-related initiatives funded from profits generated in the quarter.