Tether Profits Surge 150% to $5.2 Billion on US Treasury Yields

In the first half of 2024, Tether, the issuer of the USDT stablecoin, reported a significant profit of $5.2 billion. This substantial earnings came from interest income on its reserve assets, primarily US Treasuries, rather than from trading fees or minting more USDT. By mid-2024, Tether had accumulated $97.6 billion in US government debt, making it one of the largest holders of Treasuries globally. This strategy highlights the stablecoin business model, where users deposit fiat currency, Tether mints USDT, and the deposited dollars are invested in low-risk, yield-generating assets.

Tether's profitability is driven by its role as a financial intermediary, leveraging elevated global interest rates to generate passive income. The company's total exposure to US Treasuries, including direct holdings, reverse repos, and money market funds, approached $120 billion by March 2025. This makes Tether one of the top 20 Treasury holders worldwide, with holdings larger than many governments. Tether's diversified reserve strategy includes gold, Bitcoin, and secured loans, providing both yield and protection against market volatility. For instance, gold positions in Q1 2025 helped buffer swings in crypto markets, demonstrating the effectiveness of a mixed-asset strategy.

Tether's ongoing issuance of collateralized loans, backed by its reserves, adds another revenue layer. These loans have historically brought in hundreds of millions annually. With $5.6 billion in excess reserves as of March 2025, Tether operates more like a conservative asset manager than a tech startup. Its income sources range from interest on Treasuries and precious metals to digital assets and lending, proving that the USDT profitability model is built on more than just crypto hype.

Beyond interest income, Tether generates revenue through transaction and conversion fees, secured lending, and fintech integrations. While transferring USDT may feel free for most users, Tether monetizes on the back end, especially from issuance and redemption fees for institutional clients and exchange partnerships. In early 2025, Tether was raking in over $122 million per week in fees across networks like Ethereum, Tron, and Solana. This adds up to more than $6.4 billion annually, solidifying Tether’s position as one of the most profitable crypto companies. Secured lending, even after scaling back its operations, continues to issue collateralized loans, backed by its reserves, yielding more than government bonds and offering high-margin, low-risk income. Fintech integrations and partnerships with players like PayPal and Fiserv open up new channels for revenue through API access, transaction fees, and broader network usage.

Tether’s 2024 profits surged due to high interest rates, massive reserve scale, and operational flexibility. Throughout 2024, the US Federal Reserve held rates at elevated levels, directly boosting yields on US Treasurys, Tether’s single largest revenue driver. With tens of billions parked in these government bonds, Tether’s returns ballooned. By mid-2024, Tether had amassed $118 billion in total reserves, more than enough to back every USDT in circulation. Even small changes in interest rates translated to hundreds of millions in additional profit. Tether’s centralized structure lets it move fast, reallocating capital to chase yield, optimizing reserve duration, and reacting to market conditions without red tape.

However, the stablecoin business model is not without controversy. Tether’s reserve practices and Anti-Money Laundering (AML) compliance have long drawn scrutiny from regulators. While Tether now publishes regular attestations and has hired seasoned financial leaders, it still hasn’t released a full, independent audit. This leaves the question of whether every USDT is truly backed open to interpretation. Since early 2025, major EU-regulated platforms have either delisted USDT or limited it to “sell only” status, citing non-compliance with Europe’s new crypto regulatory framework. Tether’s profit engine is built on interest income from Treasurys, but this same strength is a vulnerability. If the Fed cuts rates by even 50 basis points, annual revenue could drop by over $600 million, forcing Tether to chase yield elsewhere or accept tighter margins. Though Treasurys provide stability, they also create concentration risk. As Tether shifts more into gold, crypto, and secured loans, it exposes itself to market volatility and counterparty risk.

The basic blueprint for how stablecoins make money is similar across the board: mint tokens, hold fiat reserves, and earn interest. However, Tether’s dominance makes all the difference. As of June 2025, USDT’s market cap exceeds $155 billion, while USDC, issued by Circle, holds around $61 billion. That scale alone gives Tether a massive profitability edge. In 2024, it reported nearly $13 billion in gross profit. By contrast, Circle, despite its strong compliance and institutional focus, earned just $156 million in net income. Circle splits its interest income with Coinbase, holds reserves in US banks, and gets audited monthly by a Big Four firm. It’s a transparent, conservative model that appeals to institutions but limits revenue. Paxos follows a similar path: smaller footprint, tight regulation, limited upside. Meanwhile, Tether keeps most of its earnings, plays the volume game, and operates with far fewer constraints. This contrast lays bare the tension between transparency and profit in the crypto revenue models landscape. Tether will eventually have to choose between sustaining its sky-high profits in an increasingly limited market or adapting to the stricter rules that now govern its rivals.