Tether creates the largest profit in the stablecoin industry using a gold strategy

In 2025, Tether delivered a performance that shook the industry: net profits surpassed $10 billion, while accumulating over $6.3 billion in excess reserves. What does this figure signify? It has made the USDT issuer one of the most profitable entities in the digital asset ecosystem and has redefined the profit potential of stablecoins.

This achievement is no accident but the result of multiple factors stacking up. In 2025, USDT issuance exceeded $50 billion, reflecting the ongoing global demand for dollar-pegged digital assets. Both institutional and retail investors are accelerating their adoption of stablecoins, especially as traditional financial institutions begin integrating them into daily cash management and payment systems.

The Three Main Drivers Behind the $10 Billion Profit

First, the TRON network has become Tether’s core settlement hub. Over $83 billion worth of USDT is hosted on this chain, processing more than 2 million transactions daily, with daily trading volume surpassing $20 billion. This massive transaction volume directly translates into Tether’s transaction fee revenue.

Second, the total size of the stablecoin market has reached $261 billion, with USDT still holding an absolute dominance. Although competitors are emerging—such as the recently launched USDU in the UAE backed by $1 billion in reserves—USDT maintains its market share through years of liquidity network development and deep integration across all major crypto exchanges and DeFi protocols.

Third, overall activity in the crypto market is rising. Bitcoin’s market dominance stands at 55.79%, with the total crypto market cap around $2.84 trillion, indicating substantial trading demand that stablecoins help meet. Meanwhile, the volatility of mainstream assets like Ethereum often reminds traders of the need for dollar-denominated safe-haven assets—precisely the core use case of stablecoins.

The Strategic Evolution of Reserves: From Cash to Gold

What truly stands out is Tether CEO Paolo Ardoino’s push for a diversified reserve strategy. The conventional wisdom suggests stablecoin reserves should be mainly cash and government bonds. But Tether is breaking this mold.

The company currently holds about 140 tons of physical gold, valued at approximately $23 billion. This scale places Tether among the world’s largest non-sovereign gold holders, rivaling some central banks. Even more aggressively, Tether continues to buy gold at a rate of 1-2 tons per week, aiming for gold to constitute 15% of total reserves.

Why gold? On one hand, with gold prices soaring above $5,600 per ounce, the gold reserves have generated significant unrealized gains, directly boosting the company’s asset base. On the other hand, gold inherently acts as a hedge against dollar depreciation—when the Federal Reserve’s easing policies fuel inflation fears, gold’s value rises, providing an additional layer of stability for USDT’s value.

How Diversified Reserves Support Record Profits

Tether’s reserve basket now includes U.S. Treasuries, Bitcoin, equity investments in tech companies, shares in gold mining firms, and collateralized loans. This multi-asset allocation directly addresses longstanding criticisms of stablecoins’ concentration risk—some companies have overly relied on government bonds.

More importantly, this diversification yields returns far exceeding traditional money market instruments. Gains from gold and Bitcoin appreciation, interest income from Treasuries, and transaction fees from the TRON network all converge into the $10 billion net profit.

Regulatory Turning Point and Institutional Acceleration

The regulatory environment in 2025 has undergone a major shift. Countries have announced comprehensive stablecoin frameworks, creating unprecedented clarity. This sets 2026 apart as a watershed year—institutions will rapidly move from pilot projects to full-scale deployment of stablecoin applications.

Standard Chartered analysts even make bold predictions: by 2028, stablecoins could siphon off $500 billion from traditional bank deposits. This reflects stablecoins’ advantages over conventional bank accounts—higher yields, greater usability, and inherent global liquidity.

2026 and Future Outlook

Based on current growth trajectories, Paolo Ardoino predicts that 2026 profits could once again surpass $10 billion, possibly approaching the $13.7 billion record set in 2024. This optimism is driven by continued adoption of USDT, higher yields from diversified reserves, and potential further appreciation of alternative assets like gold and Bitcoin.

Tether’s story demonstrates that stablecoins are no longer passive, dull financial tools. Through meticulous asset management and diversification, stablecoin issuers can generate profits commensurate with their scale while maintaining price stability. This is why Tether is expanding its lead amid fierce competition—stronger financial strength ensures greater stability guarantees, creating a virtuous cycle.