Tether, the parent company of USDT, has released its audited revenue report for the fourth quarter and the entire year of 2024, showcasing impressive data.
The report reveals that Tether achieved a net profit of 13.7 billion USD in 2024, with the group's net assets soaring to 20 billion USD. Additionally, due to ongoing investments in U.S. Treasury bonds, Tether has entered the top twenty holders of U.S. Treasury bonds, possessing over 113 billion USD.
In the fourth quarter of 2024, Tether issued more than 23 billion USD of new USDT, totaling 45 billion USD for the year. This means that the market value of USDT newly issued by Tether in 2024 alone is equivalent to the entire market value of the second-ranked stablecoin, USDC.
Main Sources of Tether's Revenue
Tether's core business model revolves around its issuance of the USDT stablecoin. For every USDT purchased, users pay Tether one USD, which Tether then invests in low-risk assets such as ultra-short-term U.S. Treasury bonds, reverse repurchase agreements, and money market funds. This seemingly simple "USD for USDT" transaction actually constructs a massive arbitrage machine. Analysts believe that Tether, linking the virtual world's finance with the real world's finance, can make a fortune through at least the following three aspects:
1. Risk-free interest margin: With the Federal Reserve maintaining a high benchmark interest rate of about 5% in 2024, Tether allocates user funds to assets with annual returns of about 4.5%-5%, bringing in substantial annual interest income.
2. Zero-cost capital pool: Unlike banks that need to pay interest on deposits, Tether does not need to pay any returns to USDT holders, and all investment returns are directly converted into profits.
3. Scale effect barriers: A hundred billion USD in funds management scale allows Tether to obtain higher interest rates through bulk transactions, with marginal costs approaching zero.
The 2024 report shows that Tether's main profits come from investments, with investments in gold and bitcoin contributing about 5 billion USD in profits, Treasury bonds contributing about 7 billion USD, and other traditional types of investments contributing about 1 billion USD.
Tether's USDT redemption reserve assets amount to approximately 143.7 billion USD, mainly directed towards six areas, with cash equivalents accounting for over 80%, and the rest distributed among corporate bonds, gold bars, bitcoin, loans, etc. The cash equivalents are primarily U.S. Treasury bonds.
Analysts believe that Tether's profitability reveals a harsh reality: in the decentralized faith-wrapped crypto world, the most profitable business is still the centralized "fiat currency mapping." As the Federal Reserve's interest rate hike cycle comes to an end, Tether has begun shifting assets towards Southeast Asian sovereign bonds and AI infrastructure loans, aiming to continue leading in the next economic cycle.
This company, operating in a regulatory gray area, is redefining the boundaries of "financial power" with real money, perhaps already becoming the true "shadow central bank" of the cryptocurrency field.
Tether's Related Operating Entities and Compliance Status
PASA has noted some information about foreign commercial entities revealed in the report.
The report shows that Tether's holding company is registered in the BVI, and its subsidiary Tether LIMITED is a currency service business (MSB) registered with the U.S. Treasury Department. According to the financial investigation bureau's regulatory requirements in BVI, Tether and its subsidiaries need to provide business reports.
Tether Group wholly owns several BVI companies, such as Tether International Limited, Tether Operations Limited, Alpha Group Commodities Limited, Tether Investments Ltd., and a Hong Kong company, Tether Limited. These companies have different functions, among which, Tether International Limited and Tether Limited are the issuing entities of the token USDT and are responsible for managing the USDT-to-USD redemption reserve assets. Tether Investments Ltd. is responsible for long-term investment operations such as sustainable energy investments, bitcoin mining, AI infrastructure construction, P2P communication technology, and some fund investment operations, which are not part of the USDT-related redemption reserve assets.
PASA believes that Tether's extensive use of BVI companies in its corporate structure is largely due to the BVI's excellent tax exemption system, privacy protection system, complete common law system, and cost-effective registration maintenance costs. Similarly, Hong Kong companies also have these characteristics.
In January 2025, after obtaining the digital asset service provider license in El Salvador, Tether has moved its headquarters and some subsidiaries to El Salvador.
