Tether, the world’s largest stablecoin issuer by market capitalization, said it is planning to invest 15 percent of its net profits into bitcoin to strengthen its reserves.
Tether said it expects the move to “strengthen and diversify” its reserves of its $1 pegged stablecoin, in a statement released on Wednesday.
“Our investment in Bitcoin is not only a way to enhance the performance of our portfolio, but it is also a method of aligning ourselves with a transformative technology that has the potential to reshape the way we conduct business and live our lives,” said Paolo Adoino, Tether’s chief technology officer.
Tether said investing in bitcoin “highlights the company’s confidence in the cryptocurrency market.”
Bitcoin reached a high of almost $69,000 in November 2021, but has since fallen to closer to $27,000 as of Wednesday morning.
Tether has a market cap valued at close to $83 billion followed by USD Coin and Binance USD, according to CoinMarketCap.
Tether reached a record net profit of $1.48 billion in the first quarter which took its total excess reserves to $2.44 billion, according to the company’s latest attestation report.
“Tether is committed to navigating the ever-changing macroeconomic landscape for its users, who have trusted Tether for the last nine years to provide the most reliable stablecoin in the market,” the company said earlier this week.
Could stablecoin legislation be on the horizon?
US lawmakers are working to regulate stablecoins such as mandating reserve requirements and banning algorithmic stablecoins.
A stablecoin bill is seen as low-hanging fruit for lawmakers to pass, compared to other legislation to regulate the crypto industry.
They came close at the end of last year when former House Financial Services Chair Maxine Waters, D-Calif., and Patrick T. McHenry, R-N.C, worked together on a bill with the Treasury Department and Federal Reserve, but didn’t “quite get there.”
The House Financial Services Committee will meet on Thursday in a hearing called “Putting the ‘Stable’ in ‘Stablecoins:’ How Legislation Will Help Stablecoins Achieve Their Promise.”