USDT profitability — Tether revenue 2024
Within the first half of 2024, Tether quietly posted one of many greatest revenue hauls in crypto historical past, pulling in a staggering $5.2 billion throughout simply two quarters.
That’s not a typo: $4.52 billion in Q1, adopted by one other $1.3 billion in Q2.
Opposite to common perception, this windfall didn’t come from buying and selling charges or printing extra USDt (USDT). It got here nearly totally from curiosity earnings on Tether’s reserve property — primarily US Treasuries.
By mid-2024, Tether had accrued $97.6 billion value of US authorities debt, quietly changing into one of many world’s largest holders of Treasurys, outpacing the reserves of many sovereign nations.
This all reveals a key a part of the stablecoin enterprise mannequin: Customers deposit fiat (like USD), and in return, Tether mints USDT whereas investing these {dollars} into low-risk, yield-generating property.
So, when you’ve ever puzzled how stablecoins generate profits, that is it: Fiat-backed stablecoins like Tether’s USDT act as monetary intermediaries. With international rates of interest nonetheless elevated, that passive earnings engine is now extra highly effective than ever.
Do you know? The world’s first stablecoin was BitUSD, launched in July 2014. Created by blockchain pioneers Charles Hoskinson and Dan Larimer on the BitShares platform, BitUSD tried to take care of its peg by locking BTS tokens into good contracts as collateral.
How Tether makes cash
Stablecoin issuers don’t lend cash like conventional banks, however they typically earn simply as a lot.
As of March 2025, Tether’s whole publicity to US Treasurys — spanning direct holdings, reverse repos and cash market funds — approached $120 billion. That makes it one of many prime 20 Treasury holders worldwide, with publicity bigger than many governments.
However Treasurys are only one piece of the puzzle. Tether’s diversified reserve technique consists of gold, Bitcoin (BTC) and secured loans, providing each yield and safety in opposition to volatility. In Q1 2025, for instance, gold positions helped buffer swings in crypto markets, showcasing how crypto pegging mechanisms can depend on a mixture of onerous property, not simply {dollars}.
In the meantime, Tether’s ongoing issuance of collateralized loans (backed by its reserves) provides one other income layer. Although much less publicized, these loans have traditionally introduced in a whole bunch of thousands and thousands yearly.
With $5.6 billion in extra reserves as of March 2025, Tether operates extra like a conservative asset supervisor than a tech startup. Its stablecoin earnings sources vary from curiosity on Treasurys and treasured metals to digital property and lending, proving that the USDT profitability mannequin is constructed on extra than simply crypto hype.
Do you know? Tether was based in 2014 in Santa Monica, California by Brock Pierce, Reeve Collins and Craig Sellars. Initially known as “Realcoin” and constructed on Bitcoin’s Omni Layer, it rebranded to “Tether” on Nov. 20, 2014.
Tether’s hidden income engines: Charges, lending and fintech
Curiosity earnings could drive Tether’s core returns, but it surely’s not the one income stream. Right here’s a deeper have a look at how Tether makes cash past simply yield.
1. Transaction and conversion charges
Whereas transferring USDT could be happy for many customers, Tether monetizes on the again finish, particularly from issuance and redemption charges for institutional shoppers and alternate partnerships.
In early 2025, Tether was raking in over $122 million per week in charges throughout networks like Ethereum, Tron and Solana, in accordance with DefiLlama and CryptoRank. That provides as much as greater than $6.4 billion yearly, solidifying Tether’s place not solely as the highest stablecoin by market cap but in addition as one of the crucial worthwhile crypto firms, interval.
2. Secured lending
Even after scaling again its lending operations, Tether continues to situation collateralized loans, backed by its reserves. These sometimes yield greater than authorities bonds and supply high-margin, low-risk earnings, contributing considerably to Tether’s backside line, even when precise figures stay undisclosed.
3. Fintech integrations and partnerships
Tether additionally advantages from its rising ecosystem, integrating with wallets, fintech platforms and exchanges. These integrations (with gamers like PayPal and Fiserv) open up new channels for income by way of API entry, transaction charges and broader community utilization.
Why Tether earned a lot in 2024
Tether’s 2024 earnings surged because of excessive rates of interest, huge reserve scale and the pliability to maneuver sooner than conventional monetary establishments.
1. An ideal interest-rate setting
All through 2024, the US Federal Reserve held charges at elevated ranges, which instantly boosted yields on US Treasurys, Tether’s single largest income driver. With tens of billions parked in these authorities bonds, Tether’s returns ballooned. That is the core of the stablecoin income mannequin: maintain person deposits in yield-bearing, fiat-backed property and pocket the curiosity.
2. Unmatched scale
By mid-2024, Tether had amassed $118 billion in whole reserves — greater than sufficient to again each USDT in circulation. Even small modifications in rates of interest translated to a whole bunch of thousands and thousands in further revenue. This type of scale is a significant cause why Tether’s revenue in 2024 dwarfed that of each different stablecoin issuer.
3. Operational flexibility
In contrast to regulated banks, Tether isn’t slowed down by capital necessities or advanced compliance layers. Its centralized construction lets it transfer quick, reallocating capital to chase yield, optimizing reserve length and reacting to market circumstances with out crimson tape.
Put collectively, these three levers — excessive yields, huge scale and quick execution — made 2024 an ideal storm of stablecoin profitability.
Dangers and criticisms of the stablecoin enterprise mannequin
However whereas the stablecoin enterprise mannequin will be extremely profitable, it’s not with out controversy, and Tether stays on the heart of a number of debates.
Ongoing regulatory stress
Tether’s reserve practices and Anti-Cash Laundering (AML) compliance have lengthy drawn scrutiny from regulators just like the Securities and Alternate Fee and worldwide monetary watchdogs. Whereas Tether now publishes common attestations and has employed seasoned monetary leaders, it nonetheless hasn’t launched a full, impartial audit. That leaves the query of whether or not each USDT is really backed open to interpretation.
European delistings
Since early 2025, main EU-regulated platforms, together with Binance, Kraken and Coinbase, have both delisted USDT or restricted it to “promote solely” standing, citing non-compliance with Markets in Crypto-Property (MiCA), Europe’s new crypto regulatory framework.
Curiosity-rate danger
Tether’s revenue engine is constructed on curiosity earnings from Treasurys. Nevertheless, that very same energy is a vulnerability. If the Fed cuts charges by even 50 foundation factors, annual income might drop by over $600 million, forcing Tether to chase yield elsewhere or settle for tighter margins.
Asset focus danger
Although Treasurys present stability, in addition they create focus danger. As Tether shifts extra into gold, crypto and secured loans, it exposes itself to market volatility and counterparty danger. That’s a trade-off between stability and yield, and one which will develop into extra pronounced as rates of interest fall.
Do you know? Underneath the EU’s MiCA guidelines, “vital” stablecoins like USDT should maintain no less than 60% of reserves in European banks — a requirement Tether has refused.
Stablecoin earnings, defined: Tether vs. different stablecoin issuers
The fundamental blueprint for a way stablecoins generate profits is comparable throughout the board: mint tokens, maintain fiat reserves and earn curiosity. However Tether’s dominance makes all of the distinction.
As of June 2025:
That scale alone offers Tether a large profitability edge. In 2024, it reported practically $13 billion in gross revenue. In contrast, Circle — regardless of its sturdy compliance and institutional focus — earned simply $156 million in internet earnings.
Why the hole? Circle splits its curiosity earnings with Coinbase, holds reserves in US banks and will get audited month-to-month by a Huge 4 agency (Deloitte and Touche). It’s a clear, conservative mannequin that appeals to establishments however limits income.
Paxos follows an analogous path: smaller footprint, tight regulation, restricted upside. In the meantime, Tether retains most of its earnings, performs the quantity recreation and operates with far fewer constraints.
This distinction lays naked the stress between transparency and revenue within the crypto income fashions panorama.
With laws slowly catching as much as Tether, it would ultimately have to decide on between sustaining its sky-high earnings in an more and more restricted market or adapting to the stricter guidelines that now govern its rivals.
