Why Tether Looks More Like a Central Bank Than a Stablecoin Issuer
The post Why Tether Looks More Like a Central Bank Than a Stablecoin Issuer appeared on BitcoinEthereumNews.com.
Key takeaways Tether operates a Treasury- and repo-heavy balance sheet, holding $181.2 billion in reserves against $174.5 billion in liabilities, leaving $6.8 billion in excess. High interest rates have turned those reserves into profit, generating more than $10 billion in interest income so far in 2025, which is uncommon for a typical crypto issuer. It exercises policy-style levers by freezing sanctioned wallets, shifting supported blockchains and allocating up to 15% of profits to Bitcoin. The central bank comparison has limits. Tether has no public mandate or backstop, relies on attestations instead of full audits and depends on private counterparties. Tether no longer looks like a simple stablecoin company. It runs a balance sheet packed with short-term US Treasurys, reverse repos, gold and even Bitcoin (BTC). It mints and redeems dollars at scale and can freeze addresses at the request of law enforcement. Its latest attestation shows $181.2 billion in reserves against $174.5 billion in liabilities, leaving $6.8 billion in excess and more than $174 billion in USDt (USDT) in circulation. With interest rates high, that Treasury-heavy portfolio has generated over $10 billion in profit so far in 2025, a figure more typical of a financial institution than a crypto startup. That is why both critics and supporters say Tether is behaving like a private dollar-linked central bank for parts of the crypto economy, though without a sovereign mandate or safety net. Acting like a central bank: What does that mean? In practice, Tether does four things that resemble central bank behavior. First, it issues and redeems money on demand. Verified customers mint new USDT by wiring in fiat and redeem it by sending USDT back for dollars. This primary market expands or contracts supply, while secondary-market trading occurs on exchanges. The actual balance sheet changes take place within that mint…
Filed under: News - @ November 11, 2025 6:22 am