Tether

At a glance

What it does

Tether mints USDT when a verified client sends dollars and burns it when the client redeems. Direct redemption is limited to verified institutional clients with a minimum of about 100,000 USD; everyone else buys and sells USDT on exchanges, where arbitrage by those clients keeps the price near one dollar.

The dollars go into a reserve. Tether's attestation for 30 June 2026 showed about 115 bn USD in US Treasuries, with the rest in cash, repo, secured loans, about 18.8 bn USD of gold and about 5.8 bn USD of bitcoin. Cantor Fitzgerald has custodied most of the Treasury holdings since 2021 and bought about 5% of Tether in November 2024.

An attestation is an accountant's opinion that a firm's statement about its reserves was accurate on one date. It is not an audit, which tests controls over a whole period. Tether publishes quarterly attestations from BDO and has never published a full audit by a Big Four firm.

USDT lives mainly on Tron and Ethereum. On Tron it is the default dollar for payments and remittances in countries where bank dollars are hard to get.

The business model

Tether keeps the interest. It pays holders nothing, and unlike Circle it has no large distribution partner taking a share of the reserve income. Tether reported more than 10 bn USD of net profit for 2025, down from the year before.

Two numbers must stay apart. Operating profit from Treasuries and repo was about 1.5 bn USD in Q2 2026. The broader result, which marks gold and bitcoin to market, was negative for the first half of 2026 because both fell. Tether's excess reserve buffer dropped from 8.23 bn USD to 4.11 bn USD between the end of Q1 and the end of Q2 2026 for the same reason.

In January 2026 Tether launched USAT, a separate token issued by Anchorage Digital Bank under US federal oversight, and in February it invested 100 mn USD in Anchorage. USAT is Tether's route into the US regulated market while USDT stays offshore.

How it is different

Circle built a licensed, public, cash-and-Treasuries model and pays heavily for distribution. Tether chose scale, an offshore base and a reserve that includes gold and bitcoin, which raises its return but adds volatility. Tether's distribution comes from being the pair every exchange already quotes, not from a revenue-sharing contract.

Where it fits

What one USDC actually is explains the claim a stablecoin holder owns. Under the hood covers reserves, attestations and freezes. How stablecoin issuers make money compares Tether's margin with Circle's. The rules explains why USDT sits outside the GENIUS Act and MiCA. Who's who in stablecoins places Tether among its peers. Related profiles: Circle, Anchorage.

Risks and open questions

Reserve eligibility is the structural issue. The GENIUS Act limits a US payment stablecoin's reserve to cash, short Treasuries, repo, money-market funds and Federal Reserve balances. Gold and bitcoin do not qualify, so USDT as it stands cannot become a US payment stablecoin. USAT exists for that reason.

Europe is closed to it. USDT is not authorized under MiCA, and regulated EU venues have delisted it for EU users.

Transparency still trails its size. Attestations are point-in-time, the custody of most Treasuries sits with one firm that is also a shareholder, and a large part of profit now swings with gold and bitcoin prices.

Like other fiat-backed issuers, Tether can freeze any address at the contract level.

What to watch next

• A first full audit, which would close the longest-running question about Tether's reserve.
• USAT's supply growth and whether US institutions choose it over USDC.
• The GENIUS Act's effective date, set by statute for 18 January 2027 at the latest, and how rules treat foreign issuers selling into the US.
• Gold and bitcoin prices, which now move Tether's reported result and its buffer more than interest rates do.