(Bloomberg) -- Tether Holdings Ltd, the entity behind the largest stablecoin, said more than $700 million in “net profit” was added in the fourth quarter to the reserve that backs the world’s most traded digital asset. 

Tether didn’t specify how the net profit was realized and has not previously quantified its financial results, and the figure was not included in a Feb. 9 attestation of its reserves conducted by accounting firm BDO Italia. Third-party attestations are not the same as financial audits, as they are limited to a snapshot in time and do not allow full access to a company’s books.

The latest attestation, which analyzed Tether’s reserves as of Dec. 31 last year, said Tether held roughly 82% of the $67 billion in assets backing its stablecoin USDT in cash and cash-equivalents. Stablecoins are digital tokens that aim to keep a one-to-one value with a less volatile asset like the dollar, typically by maintaining large reserves as segregated collateral.

The assets and practices used to back stablecoins like Tether’s USDT came under scrutiny in 2022 after the $40 billion collapse of TerraUSD, which relied on algorithmic incentives with its sister token LUNA to stay afloat. Regulators have pushed for further transparency from stablecoin issuers, with others such as Circle Internet Financial Ltd. moving to issue reserve attestations on a monthly basis.

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More than $39.2 billion of Tether’s reserve was held in short-dated US Treasury bills, an asset that has risen in popularity among stablecoin operators’ reserves as US interest rates spiked in 2022. That figure was largely unchanged from the previous quarter. At the current rate of 4.67%, Tether would net around $1.8 billion in earnings from such holdings.

The amount held with money-market funds rose 3.8% quarter-on-quarter to $7.4 billion, while its holdings in cash and bank deposits fell 12% to $5.3 billion. Its overall reserves decreased by 1.6%, in line with USDT’s circulation.

Tether also listed around 8.7% of its reserves in secured loans to non-affiliated entities, a practice that came under scrutiny after it emerged that Tether had loaned assets to bankrupt crypto lender Celsius last year. The firm said in December that it would steadily wind down such activities in 2023.

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