USDT stablecoin issuer Tether has recently made a significant addition to its Bitcoin holdings, acquiring 7,629 BTC valued at approximately $705 million. This purchase has boosted Tether’s Bitcoin reserves to 82,983 BTC, with a total value of around $7.68 billion. As a result, Tether now holds the position of the sixth-largest Bitcoin holder globally, based on data from Bitinfocharts.
This move is in line with Tether’s strategy to allocate 15% of its profits towards acquiring more Bitcoin, a plan that was first announced in May 2023. Since then, the company has been steadily increasing its Bitcoin holdings each quarter as part of its efforts to diversify its reserves, which also include assets like gold, cash equivalents, and other short-term investments.
However, Tether’s latest Bitcoin acquisition comes at a time when its flagship stablecoin, USDT, is facing regulatory challenges in the European Union. New regulations in the EU impose strict requirements on stablecoin issuers, including a controversial 30% reserve mandate similar to that of traditional financial institutions.
Quinten François, co-founder of WeRate, has raised concerns about how this requirement could impact Tether’s ability to generate income from assets like US treasuries, a key part of the company’s revenue strategy. He also pointed out that these regulations could hinder Tether’s efforts to strengthen its reserves and reduce its reliance on traditional financial systems.
However, regulatory experts like Jonathan Galea from BCAS IO have clarified that stablecoins like USDT, which are not actively marketed in the EU, may not necessarily require MiCA authorization. Galea explained that trading platforms can list these assets without direct issuer solicitation, and compliance concerns may be overstated.
In response to the FUD (Fear, Uncertainty, and Doubt) surrounding USDT, Tether CEO Paolo Ardoino has reassured the community that USDT is safe. He dismissed claims made by competitors as desperate attempts to spread misinformation, stating that “Competitors are just desperate to make you believe things that don’t exist.”
Overall, Tether’s recent Bitcoin acquisition signals the company’s commitment to diversifying its reserves and staying competitive in the ever-evolving cryptocurrency market. Despite regulatory challenges, Tether remains confident in the strength and stability of its digital assets.