Tether, the issuer of the world’s largest stablecoin by market capitalization, has recently disclosed its financial results for the first quarter of 2025. The report indicates that Tether holds nearly $120 billion in exposure to US Treasurys and has posted over $1 billion in operating profit during this period.
According to Tether’s financial report, the company’s holdings consist of approximately $98.5 billion in direct US Treasury bills, along with an additional $23 billion through repurchase agreements and other cash-equivalent assets. This diversified asset base continues to bolster Tether’s stability and reliability in the market.
The announcement also revealed that Tether currently holds $5.6 billion in excess reserves for its USDT stablecoin, a decrease from the $7.1 billion reported in the last quarter of 2024. As of May 1, the stablecoin boasts a market capitalization of $149 billion, driven by a circulating supply growth of approximately $7 billion and a 46 million increase in user wallets during Q1.
Tether’s excess capital is not solely resting idle; it is being allocated toward strategic investments exceeding $2 billion, targeting renewable energy, artificial intelligence, peer-to-peer communications, and data infrastructure initiatives.
The stablecoin sector continues to be heavily dominated by US dollar-pegged tokens, with USDT and Circle’s USDC holding a collective 87% share of the market. Projections from the US Treasury indicate that the market capitalization for dollar-backed stablecoins is on track to reach $2 trillion by 2028.
In the context of increasing reliance on stablecoins, European Union officials have recently expressed concerns regarding potential risks associated with over-dependence on dollar-pegged reserves. According to the Bank of Italy, any disturbances in the stablecoin market or the bonds backing them could have significant repercussions across the wider financial system.
As the market for stablecoins evolves, Tether’s robust financial standing and operational strategies will be crucial in navigating the challenges and opportunities ahead. The ongoing dialogue surrounding the regulation and use of stablecoins will likely shape the future landscape of digital finance.
