GM,

This week is the first of a three-part series of Tether, the company behind USDT—the world’s most traded stablecoin—which has grown into a multi-billion dollar business that holds more US bonds than many countries, and is charging into AI and other areas.

Let’s start with a look at the company and its primary business.

Best,
Gary and Jon

What’s going on?

Forget Binance or Coinbase, the richest company in crypto is one that you might not know very well—but you are likely to have touched its products in some way, shape or form.

Tether announced a $4.9 billion profit in Q2 2025—that’s just three months. During the first half of this year, it made $5.7 billion in profit, after making a profit of $13 billion in 2024. Only Hyperliquid, the decentralized exchange we wrote about earlier this summer, makes more money per employee, that’s principally because Tether is now on a hiring spree as it looks to put its gigantic profits to work.

In comparison, closest rival Circle—which issues USDC—recently posted quarterly revenue of $658 million. It has a lot more staff and partnerships with players like Coinbase. Adding in those costs, Circle made a net profit of $156 million in 2024. That’s less than five days of profit at Tether.

All of this makes Tether a company to know and keep a close eye on as the Web3 industry grows and its influence broadens and reaches into new domains.

SO WHAT?

1. A simple approach to making billions of dollars

Tether was founded back in 2014, which makes it one of the oldest companies in Web3 today. Fittingly-perhaps, it makes money in a very traditional way, by using a mixture of long-term investment projects to generate yield.

Tether is able to do that thanks to its stablecoins, which include USDT—the most traded stablecoin on earth which is pegged to the US dollar. At the time of writing, nearly $117 billion of USDT was traded during the last 24 hours.

Individual trades don’t earn Tether income, that comes when institutional investors, crypto exchanges or other large entities go directly to Tether to buy USDT or other stablecoins in exchange for fiat currency. Retail traders typically buy and sell tokens from these USDT pools.

Stablecoins are backed by fiat currency on a 1:1 basis, to ensure that holders of the token can cash out, so Tether has that full amount in deposits. The company lists its total assets at $162 billion, and US Treasury bills (T-bills) are its asset of choice when it comes to monetization.

Tether owns over $105 billion in T-bills, which typically pay out up to 4%. In recent years, it has branched out into other investment products to diversify its income. Those include corporate bonds, precious metals, secured loans and even Bitcoin. That Bitcoin holding is worth around $9 million, so it is a relatively small portion of Tether’s total exposure to investments.

Expansion has included Tether’s product mix, too. The company remains best known for USDT, which accounts for 99% of its assets, but it also offers:

• EURT: a stablecoin pegged to the Euro
• CNHT: a stablecoin pegged to the Chinese yuan
• MXNT: a stablecoin pegged to the Mexican peso
• XAUT: a stablecoin backed by physical gold

These new products don’t move the needle right now, but it is possible that Tether will need to develop and issue new stablecoins to adhere to regulatory requirements. It may also issue new tokens to adhere to increased demand in markets where stablecoins become part of the banking landscape, or at least laws allow regulated stablecoins to be issued and traded.

We wrote recently that Tether is planning to launch a US-version of USDT to comply with America’s new GENIUS Act stablecoin regulation. It may also do similar in South Korea and other countries that are following the US lead.

2. Raft of stability in a sea of volatility

The Tether empire is centered entirely around being the easiest asset for converting between fiat currencies and crypto. There’s huge demand for this trade, typically for a few main reasons.

It is a logical landing point when converting fiat currencies to cryptocurrencies. Tether’s US dollar denomination makes it easy to know what you get for your real-world US dollar.

Its stability lets traders cash out profit (or loss) when they want to exit a position on a cryptocurrency. For example, selling Bitcoin if they believe the price is going to fall or they simply want to realize some profit. Stablecoins remove the volatility while allowing the value to remain on-chain.

USDT is commonly used to stockpile ‘dry powder’ if a trader believes there will be investment opportunities in the market. On-ramping currency can be costly and time consuming, so building USDT positions can enable more nimble trading.

Stablecoins, and USDT in particular, have also become popular for non-crypto purposes, too. They are increasingly used to move money across borders without the hassle and cost of transacting with banks and cross-border remittance companies. Although, off-ramping USDT does incur cost and require a customer to be KYC (know your customer) verified by their bank.

As the biggest stablecoin in the market, Tether has attracted significant scrutiny for its popularity among shadowy groups.

Tether is one of the cryptocurrencies of choice for criminals. Russian weapons dealers, European cocaine kingpins, sanctioned oligarches and Hamas terrorists are among the many to use USDT to move money across the world, according to intelligence releases and analyst reports.

With KYC far less intrusive than traditional banking, getting an account on crypto exchanges or simply doing OTC (over the counter) deals makes Tether the channel of choice to funnel money outside of the traditional financial system.

Tether has pushed back in recent years. It says it has worked with nearly 200 law enforcement agencies across the world to identify criminals and freeze assets where it can. This is an ongoing battle, and certainly one that comes with turf if you’re the world’s most traded crypto asset.

3. The backbone of Web3

If you trade, build, lend, or move money in crypto, you’re almost certainly touching USDT, even if there's no direct contact. Tether’s stablecoin sits beneath the scenes like pipes behind a wall. It is unglamorous, ever-present and absolutely essential when things are flowing fast.

On most centralized exchanges and a growing number of decentralized options, USDT is the quote currency for price discovery. That means that liquidity concentrates around USDT pairs, which tightens spreads and lowers slippage. That gravitational pull means most project tokens list against USDT first, and market makers provision depth there before anywhere else.

Even in more advanced trading with perps, lending markets, and structured products, USDT is margin and treasury cash. Funds and market makers park idle capital in USDT because it holds $1 on-chain while remaining instantly deployable, and it has a greater critical mass than any other stablecoin.

Outside of trading, USDT has been one the go-to bridges for merchants, freelancers, OTC desks, and cross-border remittances where banking is slow, expensive, or politically fragile. This is one area where it is under pressure from Circle’s USDC stablecoin, which is more regulatory compliant. But USDT has longevity and a brand even among novice crypto owners.

Historically, there has been concern at Tether’s reserves. The company issues quarterly reports, but it has never released an audit of its reserves. Doing so would prove that the business has the requisite funds to support every token it has issued on a 1:1 basis, but that’s never materialized despite years of pressure.

It’s unclear why, but earlier this year, Tether CEO Paolo Ardoino said the company was “engaging” with a Big Four auditor, now that the Trump administration has made Web3 more mainstream.

Certainly, the lack of an audit isn’t just Tether’s problem—it is a market-wide risk factor. A disruption to issuance, redemptions, or key bridges would ripple through trading, DeFi collateral, and cross-border settlements in hours.

If Bitcoin is crypto’s brand and Ethereum its operating system, Tether is the cash drawer and the pipes. Understanding Tether isn’t optional diligence. It’s table stakes for anyone deploying capital, building products, or making policy in this industry.

News bytes

Hyperliquid is looking for alternatives to replace Circle’s USDC stablecoin on its platform—that represents 10% of Circle’s revenue, and its share price has taken a hit

Fintech startup Stripe and crypto fund Paradigm have launched a blockchain for stablecoin payments called Tempo

The Nasdaq is moving to enable the trading of tokenized securities for the first time in the US

Nasdaq is also investing in crypto trading exchange Gemini, the deal will see $50M invested with Gemini’s custodial services offered to Nasdaq’s institutional clients

Vietnam is preparing to enable digital asset trading platforms on a five-year trial with a focus on domestic providers

India, meanwhile, is reportedly resisting the urge to roll out a full crypto regulation framework—particularly as there’s a belief that stablecoins could undermine its existing financial system

That’s all for this week!

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