In the first half of 2024, Tether generated an impressive $5.2 billion, largely through interest income from its reserve assets, primarily US Treasuries. By mid-2024, Tether held $97.6 billion in U.S. government debt, positioning itself as one of the largest Treasury holders worldwide. Unlike traditional banks, Tether issues USDT in exchange for fiat and invests in yield-generating assets. Its vast reserves allowed it to benefit significantly from elevated global interest rates, leading to substantial profits. Additionally, Tether enjoys earnings from transaction fees, secured lending, and collaborations with financial platforms. Despite Tether’s success, concerns around regulatory compliance and reserve verification persist. As of 2025, Tether’s model contrasts sharply with that of competitors like Circle and Paxos, which prioritize compliance and transparency at the cost of lower profitability. Therefore, Tether’s profitability hinges on its scale, operational flexibility, and ability to capitalize on interest rate dynamics while navigating ongoing scrutiny.

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