Tether, the largest stablecoin issuer, has announced a net profit of $4.9 billion for the second quarter of 2025. This impressive figure, disclosed in a new attestation report by BDO, highlights the increasing mainstream acceptance of stablecoins and Tether's dominant position in the market. The company's success is attributed to strong US Treasury holdings, gains from Bitcoin and gold reserves, and rising demand for its USDT stablecoin.

Financial Highlights

Tether's Q2 2025 performance showcases significant growth and financial strength. Key highlights from the attestation report include:

• Net Profit: $4.9 billion for Q2 2025, contributing to a year-to-date profit of $5.7 billion.
• Core Business Profit: Over $3 billion from its core business operations.
• Bitcoin and Gold Gains: $2.6 billion from mark-to-market gains on Bitcoin and gold holdings.
• US Treasury Exposure: Increased to $127 billion, making Tether one of the largest private holders of U.S. government debt. This includes $105.52 billion in direct holdings and $21.3 billion indirectly through money market funds and reverse repurchase agreements.
• USDT Circulation: Increased by over $13 billion in Q2, reaching over $157 billion in total circulating supply. Since the beginning of the year, USDT supply has grown by $20 billion.
• Total Assets and Liabilities: Total assets surpassed $162 billion, with liabilities around $157 billion.
• Shareholder Equity: Remained stable at $5.5 billion, serving as a solvency buffer.

Paolo Ardoino, CEO of Tether, stated that the Q2 results affirm the accelerating trust in Tether, emphasizing the company's role in shaping global demand. Tether's strategic investments include approximately $4 billion in the US domestic ecosystem, focusing on initiatives like XXI Capital and Rumble.

Stablecoin Market Dynamics

Tether's success reflects the broader trend of stablecoins gaining mainstream traction. Stablecoins, particularly those pegged to the U.S. dollar, are increasingly used in crypto trading, cross-border remittances, and as a safe haven during crypto market volatility. Almost 90% of stablecoin use is for crypto trading. The market capitalization for stablecoins hit $272 billion, about 7% of the total crypto market.

USDT continues to dominate the stablecoin market, accounting for 61.7% of the total stablecoin value, with a market capitalization of $164.5 billion. However, competitors like Circle (USDC) and new entrants, including those from traditional finance like PayPal and World Liberty Financial, are vying for market share. As of July 10, 2025, Tether and USDC controlled 93% of the stablecoin market.

Regulatory Landscape and Future Outlook

The regulatory landscape for stablecoins is evolving, with the U.S. leading the way through the recent passage of the GENIUS Act. This act provides a legal foundation and regulatory clarity for stablecoin issuance, potentially paving the way for increased adoption within the financial system. U.S. Treasury Secretary Scott Bessent has projected that the stablecoin market could surpass $2 trillion within three years.

Tether's increased holdings of U.S. Treasuries also have implications for the broader financial market. As stablecoin supply grows, so does the demand for short-term government debt, which can support Treasury liquidity and reduce short-term borrowing costs.

While the future looks promising, risks remain. One significant concern is the potential for "de-pegging," where a stablecoin loses its 1:1 value with the underlying asset. Past instances, such as the TerraUSD (UST) collapse in 2022 and USDC's brief de-pegging during the 2023 regional banking crisis, highlight the importance of robust reserve management and regulatory oversight.