Tether reported $137 BILLION in US Treasury holdings, making the company the 17th largest holder of US debt
Tether takes the capital "invested" in $USDT, lends it to the US government, and collects the yield
Stablecoin holders are effectively "lending" Tether capital at a 0% interest rate, which is then flipped on Treasuries
In just 9 months of 2025, Tether alone reported profits exceeding $10 billion from its stablecoin USDT, an achievement that highlights the unique and highly profitable business model of the company in the world of digital currencies
This figure, officially announced in the Q3 2025 attestation report on October 31, 2025, reflects how Tether has evolved from merely issuing a stablecoin into one of the most profitable private companies in the sector, even surpassing some major traditional banks.How was this possible? The answer lies in the core mechanism of USDT
USDT is issued against deposits of dollars or equivalent assets from users, meaning Tether receives massive amounts of capital without paying any interest on it
The company then invests this capital in safe, highly liquid assets, with the most prominent being U.S. Treasury securities. In the Q3 2025 report, Tether’s holdings of U.S. Treasuries reached approximately $135 billion (direct and indirect), making it the 17th largest holder of U.S. debt globally, surpassing countries such as South Korea. By the end of 2025, these holdings had risen to around $141 billion (approximately $122 billion direct + reverse repurchase agreements), with total reserves reaching $193 billion backing a USDT circulation that exceeded $186 billion.The mechanism is simple yet extremely effective: USDT holders effectively “lend” capital to Tether at 0% interest, because the stablecoin is designed to maintain a $1 value without providing additional returns to holders
Tether exploits this cheap (or free) funding to purchase U.S.Treasuries that generate relatively high annual yields in a high-interest-rate environment (such as the one seen in 2025 due to Federal Reserve policies)
The yield from these Treasuries — along with minor conversion and redemption fees — forms the bulk of the profits. In 2025, the issuance of more than $50 billion in new USDT contributed to expanding this investment base, significantly increasing interest income.Additionally, Tether diversified its reserves to include $17.4 billion in gold (making it one of the largest private gold holders globally), $8.4 billion in Bitcoin, plus an excess reserve of $6.3 billion that exceeds liabilities
This diversification helped enhance stability and profitability, even though the total annual profits for 2025 reached around $10 billion (down from $13 billion in 2024 due to factors such as price volatility in gold and Bitcoin in the final quarter)
This model raises philosophical and economic questions: Does Tether represent a “digital bank” that benefits from trust in the dollar without offering returns to depositors? Users in emerging markets use USDT as an alternative to traditional dollars for remittances and value preservation, while Tether earns billions in interest. Critics see this as a “transfer” of value from holders to the company, while CEO Paolo Ardoino defends the transparency provided through periodic attestation reports from BDO, which confirm full reserve coverage.Ultimately, Tether’s success in 2025 demonstrates how stablecoins have become an integral part of the global financial system
With projections that the stablecoin market will exceed $1 trillion by 2030, and with Tether maintaining over 70% market dominance, its model — investing in safe assets against free funding — appears sustainable as long as confidence in USDT and demand for digital dollars persist
This achievement is not just numbers; it represents a transformation in how wealth is generated in the digital age, where digital reserves become a source of massive profits
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