Stablecoin issuer Tether posted a profit of $1.04 billion for the first quarter of 2026 on Friday, supported by a rise in hype around stablecoins.
The report also highlighted Tether’s excess reserves which have increased to a record $8.23 billion the current quarter. However, the number is below the $10 billion in annual profit the stablecoin giant roped in last year.
However, the attestation, prepared by accounting firm BDO, only gives a snapshot of reserves as of March 31 and is not a complete financial audit.
Tether’s optimistic quarterly report comes as the USDT remains one of the most widely used cryptocurrencies largely because of its stability.
Because it is pegged at 1:1 with the U.S. dollar, people may depend on its stability because there are no extreme fluctuations compared to other cryptocurrency types. It is very helpful for investors who usually go for USDT when there are major fluctuations to prevent unexpected losses.
Tether keeps bulk of reserves in the U.S. Treasuries
In its attestations, Tether also added that most of its reserves are still in short-term and highly liquid assets, where it has allocated approximately $141 billion in U.S. Treasury bills up to March 31. Treasury bills are considered relatively safe investments that can be quickly converted into cash.
What makes the matter noteworthy is the volume of these holdings. Tether itself has joined the top 20 holders of United States Treasuries in the world, making the company equal to Saudi Arabia and South Korea.
The holdings reveals the increasing importance of major stablecoins in the financial sector. The fact that Tether holds such huge volumes of U.S. government bonds implies the increasingly significant function of the token issuer in stimulating the demand for the dollar.
Nevertheless, the stablecoin provider further stated that although the Treasury bills are still dominating their reserves, they have also diversified a certain amount of their reserves among other assets.
These include gold worth about $20 billion and Bitcoin valued at about $7 billion. The corporation claims that this was a purposeful decision and it helps not only to ensure sufficient liquidity but also provide some stability, since it gives exposure to different assets, which can show better performance in times of market distress.
In March of 2023, Tether reported the total value of their assets at about $191.7 billion, while the liabilities were at about $183.5 billion. About $183.4 billion is attributed to their issued digital coins, mostly USDT.
This leaves an excess reserve buffer of around $8.2 billion, which acts as an added financial cushion.
Tether keeps investments separate from USDT reserves
The company further mentioned that certain investments are not included in the pool that backs up USDT. These investments are managed by a different entity called Tether Investments, which is funded by its own earnings.
Importantly, these funds are kept fully separate from USDT reserves, ensuring that the assets backing user tokens remain untouched while the company continues to invest independently.
Paolo Ardoino, CEO of Tether, said the company’s focus is simple and is aimed at making sure USDT works reliably no matter what the market looks like.
He adds that it’s not enough for a stablecoin to perform well when conditions are calm; it needs to hold up just as consistently during periods of volatility and stress.
In the first quarter, USDT circulation remained mostly steady, with total token-related liabilities at around $183 billion as of March 31. This essentially reflects the amount of USDT currently issued and in use.
Ardoino added that demand hasn’t slowed down. As of April, the supply of USDT has grown by more than 5 billion tokens, pushing it close to all-time highs. The increase shows that interest in the stablecoin is still strong as the second quarter gets underway.