Tether Made $10 Billion in 2025 From Treasury Yields. The Latest CPI Data Says That's Not Changing.

Tether reported net profit surpassing $10 billion through the first three quarters of 2025, driven overwhelmingly by interest on $135 billion in U.S. Treasury holdings. That makes Tether's Treasury portfolio the 17th largest in the world — bigger than most countries. Circle, the USDC issuer, generated $711 million in reserve income in Q3 2025 alone, up 60% year-over-year.

Both companies print money because interest rates are high. And the March CPI data suggests they'll keep printing.

The Fed's Accidental Subsidy

Here's the arithmetic. Tether holds $135 billion in Treasuries yielding roughly 4.5%. That's approximately $6 billion in annual interest income — before counting gold ($12.9 billion in reserves), bitcoin ($9.9 billion), or repo agreements. Circle holds $53.5 billion in Treasuries and overnight repos, generating an annualized $2.8 billion in reserve income.

Neither company pays yield to users. Tether's USDT holders get 0%. Circle shares a portion with distribution partners like Coinbase, but the average USDC holder sees nothing. The spread between what issuers earn on reserves and what users receive is the entire stablecoin business model.

Why CPI at 3.3% Matters

March CPI came in at 3.3% year-over-year, with energy prices up 12.5% and gasoline surging 21.2% — nearly all of it from the Iran conflict disrupting Strait of Hormuz oil flows. Core inflation at 2.6% was slightly cooler than expected, but the headline number is still well above the Fed's 2% target.

Traders are pricing in no rate cuts through 2026. If that holds, front-end Treasury yields stay in the 4-5% range. For Tether, that means another year of $5-6 billion in interest income. For Circle, roughly $2.8 billion in annualized reserve income with an estimated $940 million flowing to the bottom line after distribution costs.

The Political Dimension

This is why the stablecoin yield debate in Congress is so heated. Banks see issuers collecting billions in risk-free Treasury yields while paying depositors nothing — which is, ironically, exactly what banks themselves did for a decade of near-zero rates. The Clarity Act's stalled yield provisions are a direct fight over who gets to keep that spread.

For now, high rates are the tide lifting stablecoin issuer boats. Tether's equity is approaching $30 billion with $6.8 billion in excess reserves. Circle went public at $31 per share and hit $263. The Fed isn't cutting, and every month it doesn't is another half-billion dollars flowing to Tether's bottom line. Not bad for companies whose core product is holding dollars.