Tether Q1 Report: $120B in US Treasurys, $1B Operating Profit

Tether's Q1 2025 financial report reveals nearly $120 billion in US Treasury exposure and over $1 billion in quarterly operating profit.

  • The company holds $5.6 billion in excess reserves for its USDt stablecoin, down from $7.1 billion in Q4 2024.
  • Tether has allocated more than $2 billion in strategic investments across renewable energy, AI, communications, and data infrastructure.

Tether, the company behind the world’s largest stablecoin, has disclosed its first quarter 2025 financial results, reporting nearly $120 billion in US Treasury exposure and over $1 billion in operating profit. According to the released report, the company’s USDt stablecoin increased its circulation by approximately $7 billion during Q1, with user wallets growing by 46 million.

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The financial report indicates that Tether‘s assets include $98.5 billion held directly in US Treasury bills, with an additional $23 billion in exposure through repurchase agreements and other cash-equivalent assets. The company maintains $5.6 billion in excess reserves backing its USDt stablecoin, though this represents a decrease from the $7.1 billion excess reported in the fourth quarter of 2024.

Strategic Investments and Market Position

Tether continues to utilize its excess capital for various strategic investments, with over $2 billion allocated to sectors including renewable energy, Artificial Intelligence, peer-to-peer communications, and data infrastructure. The company’s USDt stablecoin currently boasts a market capitalization of $149 billion as of May 1, 2025, cementing its position as the dominant player in the stablecoin market.

The stablecoin market remains heavily concentrated around US dollar-pegged tokens, with USDt and Circle‘s USDC collectively controlling 87% of the market. Looking ahead, the US Treasury’s Q1 2025 report projects that dollar-backed stablecoins could reach a combined market capitalization of $2 trillion by 2028, highlighting the sector’s extraordinary growth potential.

Regulatory Concerns

Despite the industry’s robust growth, European Union officials have expressed increasing concerns about potential risks associated with overreliance on dollar-pegged stablecoins. The Bank of Italy has specifically warned that disruptions in either the stablecoin market or its underlying bond investments could trigger “repercussions for other parts of the global financial system.”

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These regulatory concerns come at a time when stablecoins are increasingly becoming integrated with traditional financial systems, raising questions about their long-term impact on global financial stability and monetary sovereignty.

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