Tether's $10B Surge: A Digital Bank's Reserves Outpace Traditional Rivals

Tether, the world's largest stablecoin issuer, reported a record $10 billion net profit in the first nine months of 2025, driven by robust returns on its diversified reserves and surging demand for its USDT token. The company's attestation report, verified by independent auditor BDO, revealed total reserves of $181.2 billion, with $135 billion in U.S. Treasuries, $12.9 billion in gold, and $9.9 billion in Bitcoin. These figures position Tether as the 17th-largest global holder of U.S. government debt, surpassing nations like South Korea, Germany, and the UAE, according to a Crypto Economy report.

The report highlights Tether's strategic expansion into physical assets, with its gold-backed XAUT token hitting a $2.1 billion market cap in October. The token, which represents 1:1 ownership of physical gold stored in Switzerland, has benefited from gold prices climbing to $4,379 per ounce in October amid inflationary pressures and geopolitical tensions, according to a CoinDesk article. Tether CEO Paolo Ardoino emphasized the milestone, stating that XAUT demonstrates "the future of asset ownership, where physical security meets digital freedom" in a Yahoo Finance interview.

Tether's financial strength is further underscored by its $6.8 billion excess reserves, which provide a buffer against liabilities of $174.4 billion. The company issued $17 billion in new USDT tokens during Q3 2025, boosting the stablecoin's market cap to $183.3 billion—a 34% increase from the start of the year. USDT now serves over 500 million users globally, solidifying its dominance in emerging markets where it functions as a digital alternative to unstable local currencies, the Crypto Economy report added.

The firm's profitability has been amplified by high-yield U.S. Treasury holdings, with Ardoino noting that Tether's exposure to Treasuries "reinforces our role as a pillar of stability in the financial and tech ecosystem." This strategy mirrors traditional banking practices, generating returns in a high-interest-rate environment while maintaining USDT's $1 peg. Tether's Q3 profits exceed those of major banks like Bank of America ($8.9 billion) and U.S. Bank ($5.5 billion) for the same period.

Looking ahead, Tether is preparing for new ventures, including the launch of USAT, a dollar-backed token tailored for the U.S. market through a partnership with Anchorage Digital Bank. The company also announced a share buyback program aimed at attracting institutional investors and has applied for an investment fund license in El Salvador, leveraging the country's pro-crypto policies, the Crypto Economy report noted.

Regulatory scrutiny remains a challenge, with U.S. and European authorities intensifying oversight of stablecoin operations. However, Tether's transparency measures, including quarterly reserve audits and a settlement with bankrupt crypto lender Celsius Network using proprietary capital, have bolstered confidence in its model, the report concluded.