Tether Reports $10 Billion Profit in 2025 So Far—Here's How That Compares to the Big Banks
News Summary
Tether reported a $10 billion profit for the first three quarters of 2025, surpassing Bank of America's $8.9 billion and U.S. Bank's $5.5 billion, and nearing the earnings of Goldman Sachs ($12.56 billion) and Morgan Stanley ($12.4 billion) over the same period. Its profits primarily stem from returns on its $135 billion in U.S. Treasuries held as reserves to back its USDT stablecoin. As of the end of Q3 2025, Tether's USDT circulating supply exceeds $184 billion, serving over 500 million users in emerging and developing countries, becoming a significant force in financial inclusion. Despite its substantial profits, Tether's profitability remains well below that of JP Morgan ($44 billion). Headquartered in El Salvador, the company plans to launch a U.S.-compliant stablecoin, USAT, by year-end to enter the American market. This move follows President Donald Trump's re-election and the passage of a legal framework for stablecoin issuance and trading in the U.S. Notably, Tether has not yet submitted to an internal audit by a Big Four accounting firm.
Background
Tether is the issuer of USDT, the world's largest stablecoin pegged to the U.S. dollar. Stablecoins are cryptocurrencies designed to maintain a stable value relative to a fiat currency (like the USD) or other assets, thereby mitigating volatility in the cryptocurrency market. Tether's core business model involves holding reserve assets, primarily U.S. Treasuries, to back its issued USDT tokens on a one-to-one basis. The company has maintained a dominant position in the crypto market, playing a crucial role in financial inclusion, particularly in emerging economies. Historically, the composition and auditability of Tether's reserves have faced intense scrutiny from markets and regulators, although it provides regular attestation reports. In the U.S., the establishment of a legal framework for stablecoins following President Trump's re-election has opened new opportunities and challenges for companies like Tether to enter the American market.
In-Depth AI Insights
What does Tether's massive profitability, particularly from U.S. Treasuries, signify beyond just financial success? - This highlights the immense profitability model of stablecoin issuers during periods of higher interest rates, essentially acting as shadow banks earning interest on vast, low-cost "deposits" (user-held stablecoins). It suggests an increasing blurring of lines between traditional financial institutions and emergent digital finance entities, portending disruptive competition in financial services. - Tether's ranking as a top holder of U.S. Treasuries, surpassing several nations, not only establishes it as a significant global financial actor but could also grant it certain geoeconomic leverage in the future, particularly concerning U.S. monetary policy and debt management. Its scale might render it an unofficial but significant player in the U.S. Treasury market. What are the potential implications for investors and regulators of Tether's plan to launch a U.S.-compliant stablecoin (USAT) and its long-standing avoidance of Big Four audits? - The launch of USAT signals a significant strategic pivot for Tether, aiming to capitalize on the evolving U.S. stablecoin regulatory framework under the Trump administration. If successful, this opens a massive new market but also subjects Tether to heightened U.S. regulatory scrutiny. Compliance will be key, but the extent of its achievement remains to be seen. - Tether's historical absence of a Big Four audit suggests a potential reluctance to disclose certain internal operations or asset details. This stance will face immense pressure when entering the highly regulated U.S. market. A lack of comprehensive auditing could continue to limit institutional investor participation and might serve as a trigger for future regulatory actions, impacting its long-term credibility and market valuation. How might Tether's dominance in emerging markets and its expansion into the U.S. market reshape the global digital financial landscape and dollar hegemony? - Tether's success in emerging markets solidifies USDT's role as a de facto digital dollar globally, especially in regions with strict capital controls or unstable local currencies. This effectively represents an organic digitalization of the dollar, bypassing traditional banking systems. - As Tether moves into the U.S. market, it will directly compete with established financial giants and could accelerate other nations' consideration of launching their own Central Bank Digital Currencies (CBDCs) to counter the growing influence of the digital dollar. This could intensify the global digital currency race and compel the U.S. to more aggressively pursue its own digital dollar strategy to maintain monetary hegemony.