In a fresh demonstration of dominance in the stablecoin market, Tether released its financials for Q1 2025, revealing a massive $1 billion operating profit and nearly $120 billion in exposure to U.S. Treasurys.
According to the latest attestation, Tether holds $98.5 billion in U.S. Treasury bills, with an additional $23 billion tied up in repurchase agreements and other liquid, cash-equivalent assets. These reserves underpin the company’s USDt (USDT) stablecoin, which now boasts a circulating market capitalization of $149 billion as of May 1.
Though still robust, Tether’s excess reserves dipped slightly to $5.6 billion—down from $7.1 billion recorded at the close of 2024. Despite the decline, the company emphasized continued expansion, with the USDT supply swelling by $7 billion over the quarter and 46 million new wallets added to its user base.
“Circulating supply of USDT grew by approximately $7 billion in Q1, with a 46 million increase in user wallets,”
it said.
Tether also highlighted its strategic reinvestment of surplus capital, stating that over $2 billion has been directed toward sectors like renewable energy, artificial intelligence, decentralized communications, and data infrastructure.
The stablecoin market remains heavily U.S. dollar-centric, with Tether’s USDT and Circle’s USDC commanding a combined 87% market share. The U.S. Treasury’s Q1 outlook projects that the total value of dollar-pegged stablecoins could balloon to $2 trillion by 2028.
Meanwhile, European financial regulators are sounding alarms. Authorities in the EU and the Bank of Italy have warned that excessive reliance on dollar-linked stablecoins may pose systemic risks, particularly if disruptions occur within the stablecoin space or the U.S. bond markets that support them.
The central bank underscored the sharp volatility of cryptocurrencies, particularly Bitcoin, as a significant threat. It emphasized that as digital assets become increasingly intertwined with traditional finance and the real economy, the potential fallout from their price swings could extend far beyond individual investors.
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