Tethers Reserve Buffer Cut In Half As Undisclosed Comprehensive Loss Exceeds $4 Billion
The latest reserve attestation from Tether, the issuer of the worlds dominant stablecoin, reveals a shrinking financial cushion at a time when lawmakers in Washington debate the contours of stablecoin regulation. Excess reserves that stood at a record $8.23 billion at the end of March collapsed to $4.11 billion by June 30, a 50% drop detailed in a disclosure first reported by WuBlockchain. The halving of this buffer removes a layer of protection that many traders and protocols count on. Tethers income statement appears healthy on the surface. The company booked $1.5 billion in net operating profit for the second quarter. But the comprehensive financial result for the first six months — a metric that folds in unrealized gains and losses — landed at negative $3.17 billion. Paired with the previously reported Q1 net profit of about $1.04 billion, the arithmetic points to a comprehensive quarterly loss that comfortably exceeded $4 billion. Tether offered no breakdown of what drove the swing beyond the existence of unrealized losses, leaving the composition of those paper losses opaque. Collateral Mix Under the Microscope The sharp drop in excess reserves puts the quality and liquidity of Tether‘s backing assets back into focus. While the firm has gradually