$13 billion in net profit per year, that is the amount, by the most conservative estimates, generated by Tether, the largest stablecoin issuer, in 2024–2025. For comparison: the revenues of many traditional banks and asset managers with comparable asset volumes are significantly lower. How did Tether and Circle, the issuers of USDT and USDC, transform into an invisible “printing machine” for the cryptoeconomy, and why have their business models become the subject of close interest not only from entrepreneurs but also regulators worldwide?
Today, stablecoins are not merely a tool for fast international transactions or hedging volatility. Their market capitalization exceeds $200 billion, and the liquidity of USDT and USDC has become the standard for institutional clients, venture funds, and fintech companies on all continents. However, behind the apparent simplicity—one token equals one dollar—lies a complex system of backing, reserve management, banking interactions, and strategic partnerships.
In this article, I, Nikita Veremeev, founder of COREDO, propose to dissect the business models of Tether and Circle, reveal their real income sources, uncover regulatory nuances, and provide practical recommendations for companies that already use or plan to integrate stablecoins into their processes. If you want not just to understand how this market works but to gain strategic ideas for business development, read on.
Profits of Tether and Circle Stablecoins
Profits of Tether and Circle Stablecoins are largely formed due to their unique approach to reserve and investment management. To understand how issuers ensure token stability and generate income, it’s essential to examine their approaches to issuance and reserves.
Issuance and Reserves of Stablecoins
The basic logic behind stablecoin issuance is simple: every new USDT or USDC is issued under the provision of fiat currency (usually the US dollar) or equivalent liquid assets. A client, whether an exchange, OTC desk, or institutional investor, sends dollars to the issuer’s bank account, receiving tokens in return. During the reverse operation—redemption—the issuer burns tokens and returns fiat.
However, in practice, stablecoin backing is not just about fiat deposits. Reserves of Tether and Circle include US Treasury bonds, bank deposits, commercial papers, and in Tether’s case, several less transparent instruments. Reserve management becomes a separate income source: the funds held in accounts work for the issuer, bringing in interest income.
Our experience at COREDO has shown that for large corporate clients, the key question is not only the liquidity of stablecoins but also the transparency of token redemption mechanisms as well as the quality of reserve assets. In crisis situations, such as mass withdrawals: it’s the reserve structure and the ability to quickly convert them into fiat that determine an issuer’s sustainability.
Income from Interests and Investments
The main source of stablecoin profits is interest income from investing reserves. In an environment of high Fed rates in 2023–2025, the yield on short-term US Treasury bonds exceeded 5% per annum. With reserves amounting to hundreds of billions of dollars, even a small difference between the asset’s interest rate and the issuer’s liabilities results in billion-dollar profits.
The solution developed at COREDO to analyze issuers’ financial flows highlights several key elements:
- Tether invests a significant portion of reserves in treasuries and other liquid instruments, receiving interest income that almost entirely remains with the issuer. According to COREDO estimates, in 2024, Tether’s revenues exceeded $13 billion due to rising interest rates and an increase in USDT issuance.
- Circle, on the other hand, shares up to 50% of the interest income with institutional partners, primarily Coinbase. This reduces the issuer’s net profit but ensures a stable institutional infrastructure and a high level of trust from corporate clients.
- In addition to interest income, there are hidden profit sources: issuance and redemption fees, investments in high-yield instruments, income from operations with crypto reserves, and partnership programs with exchanges.
COREDO’s practice confirms: for companies dealing with large volumes of stablecoins, it is important to consider not only the nominal reserve yield but also the risks associated with asset structure and liquidity management strategies.
Distribution of Income Between Partners and Issuers
The profit distribution strategy distinguishes Tether from Circle. In Tether’s model, almost all interest income stays with the issuer, ensuring maximum profitability but creating conflicts of interest with institutional clients and partners. In the case of Circle, up to 50% of USDC reserve income is divided between the issuer and partners, primarily Coinbase, which lowers the margin but increases the ecosystem’s sustainability.
COREDO’s team has implemented projects for clients for whom understanding how income is distributed between the issuer and their bank-partner or exchange was critically important. In several jurisdictions, especially in the EU and Asia, transparency in income distribution becomes a regulatory requirement and a factor in the choice of issuer for corporate clients.
Comparison of Tether and Circle’s Reports
Comparing Tether and Circle’s reports helps to understand how the largest stablecoin issuers ensure user trust in their tokens through regular financial data disclosure. Differences in transparency levels and auditor roles play a key role in the perceived reliability of each project, especially against the backdrop of increasing scrutiny of reserves and control mechanisms in the stablecoin sector.
Disclosure of Reserves: Auditor’s Role
The issue of reserves transparency is one of the most pressing for the stablecoin market. Circle publishes monthly reserve reports, and the audit by Deloitte and Touche, a recognized Big Four auditor, provides an additional layer of trust. USDC’s reserves are primarily held in US Treasury bonds and accounts at the Bank of New York Mellon, meeting institutional reporting standards.
Tether, on the contrary, offers periodic reports and does not conduct regular independent audits according to Big Four standards, creating risks for institutional clients and complicating the assessment of the actual quality of reserves.
COREDO’s experience in licensing and compliance support for clients in the EU and Asia shows: to enter new markets and work with major institutional partners, financial transparency as well as compliance with international audit and reserve certification standards is required.
Transparency or Profitability: What to Choose?
Tether’s model demonstrates: minimal transparency allows for maximum profitability, but increases long-term risks for the issuer and clients. Circle, however, sacrifices part of the income for the sake of transparency and sustainability.
In COREDO’s corporate practice, we have encountered cases where clients chose a less profitable but more transparent stablecoin for integration into their business processes, especially with the tightening of regulation and reserve audit requirements. The long-term sustainability of the business directly depends on balancing transparency and profitability, as well as the issuer’s ability to adapt to new market requirements.
Stablecoin Regulation in the EU, Asia, and Africa
Stablecoin Regulation in the EU, Asia, and Africa significantly changes the global crypto-assets market. The introduction of unified standards, such as MiCA in Europe, requires issuers to adopt new approaches to transparency and risk management, while Asian and African countries gradually form their own rules to keep pace with global trends. This creates new challenges and opportunities for profitability and the development of stablecoins in each region.
The Impact of MiCA on Stablecoin Profits
The introduction of MiCA (Markets in Crypto-Assets Regulation) in the EU has become a turning point for the stablecoin market. The new regulation requires not only full disclosure of reserve structures but also regular independent audits, implementation of KYC/AML procedures, and emission restrictions for non-qualified investors.
COREDO’s solutions for clients in the EU and Slovakia showed that implementing MiCA leads to increased compliance costs and reduced issuer margins, but at the same time increases trust from institutional clients. For Tether, this means the need to restructure its business model, reduce the share of opaque assets, and increase spending on audits and information disclosure. For Circle, new requirements become a competitive advantage, allowing for expanded presence in the European market.
AML/KYC for Business
Modern KYC/AML procedures and financial compliance are an integral part of the corporate infrastructure when dealing with stablecoins. Non-compliance with these requirements leads to risks of account blocking, fines, and loss of access to key markets.
COREDO’s practice in Asia and the EU confirms that for successful integration of USDT and USDC into corporate processes, it is necessary to build internal compliance procedures, automate transaction monitoring, and regularly conduct audits to ensure compliance with regulatory requirements. This allows minimizing non-compliance risks and increasing efficiency in working with institutional partners.
Regulation in Asia and Africa
In Asia, stablecoin regulation ranges from strict licensing requirements (Singapore, Hong Kong) to more flexible regimes (UAE, some Southeast Asian countries). In Africa, there is growing institutional demand for transparent stablecoins for cross-border payments and inflation protection.
The COREDO team has implemented projects for company registration and obtaining financial licenses in Singapore, Dubai, and Estonia, where meeting local information disclosure requirements and forming strategic partnerships with banks and payment providers was key to success. For business scaling in these regions, it is critical to consider regulation specifics and build institutional infrastructure that meets international standards.
Risks for Issuers and Corporate Clients
Risks for issuers and corporate clients become especially significant in the rapidly changing cryptocurrency market and limited regulation. Besides high volatility and technical complexities, companies need to pre-assess potential threats associated with liquidity, token redemption, and reserve reliability to minimize possible losses and protect client interests.
Liquidity and Token Redemption: Reserve Testing
The liquidity of stablecoins and an issuer’s ability to ensure quick token redemption are key parameters for corporate clients. During periods of market turbulence, it is the quality of reserve assets and the presence of stress-testing that determine an issuer’s sustainability.
COREDO’s solution for assessing the liquidity of USDT and USDC includes analyzing reserve structures, asset diversification, and stress-testing scenarios. For companies working with large volumes, it is crucial to regularly conduct independent reserve checks and evaluate liquidity risks in case of mass fund withdrawals.
Thus, for a comprehensive assessment of sustainability, it is important to consider not only an issuer’s internal mechanisms but also external macroeconomic factors, such as the dynamics of interest rates and inflation.
The Impact of Interest Rates and Inflation
Stablecoin profitability is directly tied to Fed interest rates and macroeconomic factors. Rising rates increase Tether’s and Circle’s revenues but simultaneously raise requirements for reserve quality and risk management. Inflation and market volatility can lead to emission limits and reduced profitability, especially under stricter regulation conditions.
COREDO’s practice has shown: for long-term business sustainability, it is necessary to implement hedging tools for interest and currency risks, and to regularly review reserve management strategies considering market capitalization changes and regulatory requirements.
Loss of Trust: Market Consequences
A loss of trust in the issuer is a scenario that may occur with insufficient transparency, problems with token redemption, or identified reserve structure inconsistencies. For Tether, this means potential capital outflows and increased regulatory pressure. For Circle, risks are linked to possible failures in the partnership infrastructure and changes in income distribution.
Tether’s key competitive advantage is its scale and liquidity, but long-term stability requires adaptation to new transparency standards and corporate governance. Comparison with traditional asset managers like BlackRock underscores that institutional demand for transparent and sustainable stablecoins will only increase.
Tether or Circle – What to Choose?
Parameters and Indicators of Tether and Circle
| Parameter | Tether (USDT) | Circle (USDC) |
|---|---|---|
| Market Capitalization | ~$146 billion (2025) | ~$60 billion (2025) |
| Reserve Structure | US Treasury bonds, cash | 80% treasuries, 20% – Bank of NY Mellon |
| Level of Transparency | Limited, irregular audit | Monthly reports, Deloitte audit |
| Reserve Yield | Higher (revenue $13 billion in 2024) | Lower, 50% shared with Coinbase |
| Income Distribution | In favor of the issuer | 50%: institutional partners |
| Main Partners | Crypto exchanges, OTC desks | Coinbase, Bybit, banks |
| Scaling Strategies | Global expansion | Focus on compliance and EU |
Thus, differences in reserve management, transparency, and partnership strategies define each stablecoin’s specific nature and are relevant when evaluating their usage for businesses.
Risks and Applications of Stablecoins for Businesses
Risks and Applications of Stablecoins for Businesses are not just new opportunities for asset management and transactions but also pose important questions regarding trust, regulation, and stability. Before integrating such tools into business processes or considering them for investments, key risks and criteria for choosing the right stablecoin should be carefully evaluated.
How to Choose a Stablecoin for Investment
Assessing the issuer’s reliability is the first step when integrating stablecoins into corporate processes. Selection criteria include reserve transparency, the presence of independent audits, compliance with institutional reporting standards, and the quality of partnership infrastructure.
COREDO recommends requesting regular reserve reports from the issuer, verified by Big Four auditors, and analyzing asset structures and token redemption mechanisms. For companies operating in the EU and Asia, compliance with MiCA and local regulatory requirements becomes mandatory.
Compliance and KYC/AML for Business
Implementing stablecoins requires building internal compliance procedures, automating KYC/AML, and integrating financial compliance across all stages of token operations. A solution developed by COREDO allows for transaction monitoring automation, risk minimization of non-compliance, and enhancing interaction efficiency with banks and institutional partners.
For corporate clients, it is important not only to comply with regulatory requirements but also to build processes that minimize transaction costs and enhance operation transparency.
Metrics and KPIs for Stablecoin Implementation
Key efficiency metrics include:
- ROI of stablecoin implementation in corporate payments
- Reduction in transaction costs compared to traditional tools
- Liquidity level and token redemption speed
- Share of operations compliant with KYC/AML and compliance requirements
- Regularity and quality of reserve audits
COREDO’s practice shows that integrating these metrics into corporate reporting not only enhances work efficiency but also minimizes strategic risks during business scaling.
Key Insights for Businesses and Leaders
- The business models of Tether and Circle demonstrate different approaches to balancing profitability and transparency. Tether focuses on maximizing income through minimal transparency, Circle: on institutional stability and compliance.
- Regulation (primarily MiCA in the EU) becomes a determining factor for issuers’ long-term sustainability and competitiveness. Companies choosing stablecoins for corporate payments must consider not just current profitability but also risks associated with changing regulatory environments.
- Regular reserve audits, transparency in asset structure, and implementing compliance procedures that meet international standards are critically important. This minimizes non-compliance risks and increases trust from partners and regulators.
- Integrating stablecoins into corporate processes requires strategic planning, ROI assessment, and implementing efficiency metrics. Solutions implemented by the COREDO team enable not only cost reduction but also long-term sustainability of the business in a rapidly changing financial ecosystem.