Tether's $135B Treasury Stake Rivals Sovereign Powers

Tether International S.A. de C.V., the issuer of the world's largest stablecoin, reported year-to-date net profits exceeding $10 billion as of Q3 2025, according to CoinDesk, driven by robust demand for its USD₮ token and strategic investments in U.S. Treasuries. The company's total exposure to U.S. government debt reached an all-time high of $135 billion, elevating Tether to the 17th largest holder of U.S. Treasuries globally, according to Ambcrypto, surpassing South Korea and placing it ahead of nations like Germany and Saudi Arabia, as BeInCrypto reported. This milestone underscores the growing influence of stablecoins in traditional finance, as Tether's reserves now rival those of sovereign states.

The Q3 2025 attestation, audited by BDO, a top-five global accounting firm, confirmed Tether's financial transparency and reserve composition, according to Tether's Q3 2025 attestation. The company held $181.2 billion in total reserves to back its $174.4 billion in liabilities, with a $6.8 billion excess buffer. U.S. Treasuries accounted for the bulk of its holdings, complemented by $12.9 billion in gold and $9.9 billion in Bitcoin. CEO Paolo Ardoino emphasized that these diversified reserves reinforce Tether's stability, stating, "Tether stands as a pillar of stability in the financial and tech ecosystem."

Tether's growth in Q3 was marked by a $17 billion expansion in USDT issuance, pushing the token's total supply past $174 billion. This performance solidified its dominance in the stablecoin market, despite competition from Circle's USDC, which grew 72% year-to-date in market capitalization compared to USDT's 32% increase, according to Bankless. The company also surpassed 500 million users globally, reflecting broader adoption of its digital dollar ecosystem.

The surge in Treasury holdings aligns with regulatory shifts, notably the U.S. GENIUS Act, which mandates stablecoin reserves be held in low-risk assets. Tether's exposure to Treasuries has grown rapidly, from $65 billion in Q1 2025 to $135 billion by September, as it navigates evolving compliance requirements. This strategy not only strengthens Tether's liquidity profile but also positions it to capitalize on interest income from its vast Treasury portfolio, contributing to its extraordinary profitability.

Beyond Treasuries, Tether has diversified its financial strategy. The company launched a share buyback program targeting institutional investors and applied for an Investment Fund License in El Salvador under the country's new Private Alternative Investment Fund law. Additionally, Tether settled its litigation with bankrupt crypto lender Celsius using proprietary capital, ensuring no impact on reserves backing USDT.

While Tether's financial strength is evident, challenges persist. The stablecoin faces scrutiny over transparency and regulatory compliance, particularly as central banks and lawmakers examine the systemic risks posed by large stablecoins. However, Tether's CEO remains confident in its model, highlighting plans to launch USAT—a U.S.-regulated stablecoin compliant with the GENIUS Act—to further penetrate American markets.

The company's strategic initiatives, including investments in AI, renewable energy, and P2P communications, aim to expand its ecosystem beyond finance. Ardoino noted that Tether's proprietary equity approaches $30 billion, underscoring its capacity for innovation and resilience amid macroeconomic volatility.

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