Tether reported $1.5bn in net operating profit for the second quarter as the issuer of the world's largest stablecoin widened its lead over rivals by increasing the supply of USDT, despite a broader slowdown in the stablecoin market.
Tether Widens Lead Over Stablecoin Rivals as USDT Grows Despite Market Slowdown
31 July 2026 - 19:18 UTC
By Jona Jaupi
According to the company's latest reserve report, published on 31 Jul, circulating USDT rose to $184.6bn at the end of June – $446mn higher than three months earlier. Tether said the increase gave it more than 60% of the global stablecoin market.
USDT market captalization is now more than double the next five largest stablecoins combined, which is $91bn across Circle's USDC, Sky Dollar (USDS), DAI, World Liberty Financial USD (USD1) and Ethena's USDe, according to DeFiLlama.
"Q2 demonstrated the strength of Tether's reserve strategy under real market pressure," Tether CEO Paolo Ardoino said in a statement.
Broader stablecoin slowdown
Stablecoins are digital tokens designed to maintain a fixed value, typically by being pegged to the US dollar. They are widely used as the primary settlement asset in crypto markets, allowing traders to move funds between exchanges, buy and sell digital assets, make payments and transfer money across blockchains without relying on traditional banking rails.
The sector has shown signs of a slowdown after years of steady growth. Data from DeFiLlama show the total value of stablecoins in circulation has fallen by $7.5bn since its early-April peak to around $308bn on 31 Jul, while USDT continued to expand its footprint. Still, activity around stablecoins remains intense, with payments companies, banks and crypto firms investing in the infrastructure needed to use them for settlement and everyday transactions.
Analysts say the decline reflects the changing use case of stablecoins rather than weaker demand. For instance, some investors have moved money into yield-bearing tokenized Treasury funds, while businesses are using stablecoins more for payments than as a store of value. Weaker trading activity on crypto exchanges has also contributed to the slowdown.
Treasuries drive earnings
Most of Tether's $1.5bn operating profit came from interest earned on the US Treasury securities and repurchase agreements backing USDT. When users buy USDT, Tether invests much of the dollars it receives in low-risk assets such as Treasury bills, allowing it to earn interest while keeping the tokens fully backed.
At the end of June, the company held $187.75bn in assets, including cash, Treasuries and other investments, compared with $183.64bn in liabilities - mostly USDT and other digital tokens it has issued. That left Tether with a reserve buffer of about $4.11bn.
The company said it remained one of the world's largest holders of US government debt, with Treasury exposure exceeding that of countries including Germany and the United Arab Emirates and Australia. It also reduced its secured loans by about $2.38bn, or 15%, during the quarter as it continued to scale back that part of its reserves.
