Ever wondered how Tether, the company behind the world’s largest stablecoin, actually turns a profit? It’s simpler than you might think.
When someone mints USDT, they send Tether dollars (or equivalent assets). Tether then invests the bulk of those reserves in short-term US Treasury bills and other low-risk instruments. The yield from those investments is essentially Tether’s revenue.
Think of it like a bank, but stripped down to the basics: take deposits, invest in safe government debt, collect the interest. No lending, no exotic derivatives — just Treasury yield.
With USDT circulating in the tens of billions, even a modest yield adds up fast. Tether doesn’t charge users to mint or redeem the stablecoin, so the reserve interest is the core of the entire business.
It’s a model that’s drawn scrutiny from regulators and competitors alike. But love it or hate it, it works — Tether has been consistently profitable, and USDT remains the dominant stablecoin by a wide margin.
