• Tether (USDT) has announced it will reach $1.6 billion in excess reserves by the end of the March quarter.
• Tether Chief Technology Officer Paolo Ardoino disclosed that it expects an estimated $700 million in profit within the said period pushing the reserves higher.
• The firm makes money by charging withdrawal fees, investing in precious materials and digital tokens, and issuing loans to institutions earning interest.

Tether Announces $1.6 Billion Excess Reserves

The number one stablecoin by market cap, Tether (USDT), has announced it will reach $1.6 billion in excess reserves of USDT by the March quarter. According to Tether Chief Technology Officer Paolo Ardoino, this would be achieved through an estimated $700 million in profit within the said period, which would push the reserves even higher.

How Does Tether Make Money?

Tether makes money primarily by charging a withdrawal fee for users of its platform; with a minimum amount of $100,000 being able to be withdrawn at one time. Additionally, it earns money from investing in precious materials and digital tokens as well as issuing loans to various institutions that earn interest from such transactions.

Silicon Valley Bank Crash Boosts USDT Usage

The challenges USDC faced when Silicon Valley Bank (SVB) crashed also pushed up USDT usage significantly. After Circle announced that they had around $3.3 billion of their USDC reserve stuck in SVB due to banking issues, USDC de-pegged from the USD causing investors to panic and sell off their holdings quickly — many turning to USDT instead as a safer alternative despite having to exchange them below their market value just so they could cut costs on their transaction fees.

USDT Used As Safer Alternative To USDC

Understandably, this loss of confidence in USDC caused Tether CTO Paolo Ardoino to recommend using USDT as an alternative for safety reasons — noting that unlike traditional banks who are experiencing losses due to economic slowdowns or other reasons out of their control — Tether is actually making money during this time thanks mainly because user activity remains high on its platform .

Conclusion

In conclusion, with its announcement regarding reaching $1.6 billion excess reserves come March 2021 and its numerous ways of making profits through its platforms services — it’s no surprise that more people are turning towards using USDT instead of other stablecoins like USDC given its stability and reliability during times like these when financial security is more important than ever before