Key Takeaways:
- Tether made $1B in Q1 profit and boosted U.S. Treasury holdings to $120B.
- USDC supply surged to $62 billion after a 78% year-over-year increase
- USD1 enters the race, backed by political and institutional interests.
- PYUSD gains momentum after SEC drops its probe
Tether International (TI) added nearly $7 billion to the supply of its U.S. dollar-pegged stablecoin, USDT, during the first quarter of 2025.
According to the company’s latest report, it now holds almost $120 billion in U.S. Treasuries and related instruments, including both direct investments and those managed through funds and short-term lending agreements. These assets serve as the primary backing for (USDT), which is designed to maintain a stable value equal to 1 U.S. dollar.
Tether Reports Wallet Growth and Strong Q1 Profit
According to the report, the number of wallets holding (USDT) rose by approximately 46 million in Q1, representing a 13% increase from the previous quarter. The stablecoin’s growing use in payments, trading, and remittances suggests continued interest in stable digital alternatives to fiat currency.
Tether also reported a profit of $1 billion for the quarter, mainly from interest earned on its U.S. government treasury holdings. Furthermore, the company’s extra cash reserves, which serve as an additional buffer beyond what’s needed to back USDT, rose to $5.6 billion.
Tether Secures Regulatory Ground and Eyes Broader Initiatives
According to the report, Tether began operating under formal regulation in El Salvador during Q1, following approval as a stablecoin issuer under the country’s digital asset framework.
The company also invests in long-term projects in many sectors, like AI, renewable energy, and digital infrastructure. However, it’s worth noting that these investments are not part of the reserves backing USDT and do not affect its stability.
Rising Stablecoin Competition Challenges Tether’s Dominance
USDC Leverages Global Expansion and Payment Integrations
While (USDT) remains the most circulated stablecoin, competition is growing. USDC, issued by Circle, has surged to $62 billion in supply after a 78% year-over-year increase. The company reported $1.68 billion in 2024 revenue and has filed for a public listing on the NYSE under the symbol “CRCL.”
Furthermore, Circle secured regulatory approval in Abu Dhabi and introduced new infrastructure for cross-border payments. Partnerships with Visa and Baanx have enabled USDC-linked cards, allowing users to spend stablecoins directly from wallets.
USD1 Enters Market With Political and Institutional Backing
A new player, USD1, has entered the scene with backing from World Liberty Financial. The dollar-pegged token has already been selected for a $2B investment into Binance by Abu Dhabi’s MGX.
PYUSD Eyes Growth After SEC Clears Probe
PayPal’s stablecoin, PYUSD, launched in August 2023, has experienced a 75% increase in circulating supply since the beginning of 2025. Despite this growth, its market capitalization stands at approximately $880 million.
Additionally, the U.S. Securities and Exchange Commission (SEC) concluded its investigation into PYUSD in February 2025 without taking any enforcement action, removing a significant regulatory hurdle.
Furthermore, PayPal has introduced a 3.7% annual yield for U.S. users holding PYUSD and partnered with Coinbase to expand its reach and boost adoption.
