Tether Posts $1Bn Profit in Q1 2025 as Treasury Holdings Near $120Bn
The USDT issuer saw its reserves shrink as its profit came down from the previous quarter.
Tether, the company behind the world's largest stablecoin, reported $1 billion in operating profit for Q1 2025, its first quarter under regulatory supervision in El Salvador. Despite robust profitability, the company's excess reserves declined to $5.6 billion from $7.1 billion in the previous quarter.
The financial results, released Thursday, reveal Tether's continued dominance in the stablecoin sector despite ongoing regulatory pressures in Europe. The company's USDT stablecoin maintains a market capitalisation of $149 billion as of May 1, 2025.
Treasury Holdings Surge
Tether's Q1 report shows its US Treasury holdings approaching $120 billion, including $98.5 billion in direct Treasury bills and additional exposure through repurchase agreements and money market funds.
The figures position Tether as a significant holder of US government debt. For perspective, Japan, the largest foreign holder of US Treasuries, holds approximately $1.126 trillion.
First Quarter in El Salvador
This marks Tether's first financial report since establishing its headquarters in El Salvador, a move that came amid increasing regulatory pressure in Europe. The company relocated following the implementation of the EU's Markets in Crypto-Assets (MiCA) regulation, which has led major European exchanges to delist USDT.
Read: Crypto Exodus to El Salvador 🇸🇻
The strategic pivot to El Salvador appears to have insulated the company from some of the European regulatory impact. Despite being shown the door by major exchanges like Coinbase, Crypto.com, and Kraken in Europe, Tether's global operations continue to expand, particularly in emerging markets.
While Tether maintains its required 100% backing for all issued tokens, the excess reserves buffer has narrowed to $5.6 billion, its lowest level since Q2 2024, when the company held $5.3 billion in excess reserves.
This contraction comes as Tether continues to allocate capital toward strategic investments. The company reported more than $2 billion allocated to ventures in renewable energy, artificial intelligence, peer-to-peer communications, and data infrastructure.
Earlier this year, Tether reported $13 billion in profits for 2024, nearly matching investment bank Goldman Sachs' $14.28 billion. The Q1 2025 results suggest a more moderate profit trajectory for the current year.
Read: Too Big to Ban 🚫
User Growth Continues
Despite regulatory headwinds in Europe, Tether reported significant user growth. The company noted a 13% increase in user wallets during Q1, bringing USDT's total user base to approximately 415 million globally. Tether highlighted that 37% of this user base employs USDT for savings.
Yet, it’s seeing the dynamics change with a lot of competition brewing around in the stablecoin space.
Read: Circle Moving Fast in Stablecoin Race 🏃🏼
For a company that was effectively pushed out of Europe by regulatory pressure, Tether's Q1 results demonstrate continued resilience, though the declining excess reserves could signal challenges ahead in maintaining its ambitious growth strategy.