Tether reported a successful second quarter before MiCA’s impact is fully felt.
Tether has grown its share of the stablecoin market to more than 60% in the second quarter (Q2) as USDT continued to expand amid a period of volatility.
Paolo Ardoino, CEO of Tether, said the issuer’s reserves had been “tested directly” during the quarter and USDT circulation reached approximately $184.6bn by the end of June, which was around $446m higher than in the first quarter.
This increase took place while the wider stablecoin market contracted to $305.1bn, which represents the first quarterly decline for the sector in almost three years.
The stablecoin issuer reported net operating profit of around $1.5bn, with Ardoino saying that Q2 demonstrated the “strength of Tether’s reserve strategy under real market pressure.”
Reserve strategy holds through volatility
An independent attestation from BDO confirmed that Tether held $187.75bn in total assets against $183.64bn in liabilities at the end of June.
Tether said its reserves were anchored in short‑duration and highly liquid instruments, with US Treasury bills forming the core of the portfolio. The company held around $115bn in Treasuries by the end of the quarter, making it one of the largest private purchasers of the asset class.
Treasury bills have become a popular reserve instrument for stablecoin issuers because they provide predictable liquidity and allow issuers to meet redemptions while still generating yield from short‑term government debt.
Tether also made changes to other parts of its reserves, with secured lending exposure falling by $2.38bn and physical gold holdings increasing by fourteen tonnes to more than one hundred and forty‑six tonnes.
Other activity saw Bitcoin holdings reach $5.8bn, and the rest of the reserves included $18.8bn in precious metals, $3.8bn in public equities and $13.5bn in secured loans.
“These results show that Tether has the liquidity, discipline, and scale to remain resilient across market cycles while continuing to serve hundreds of millions of users around the world,” said Ardoino.
A bigger share of a shrinking market
Stablecoin circulation has grown for several years, but Q2 broke the pattern as overall activity slowed and several issuers saw declines in supply.
However, Tether, which already held the largest market share, didn’t follow the trend. Its share rose above 60% and the gap between USDT and the rest of the sector widened even further.
The company said the rise was due to demand across several regions and noted that its user base expanded during the period to more than 30 million users.
Attention will likely turn to the company’s next quarter, as USDT was delisted from regulated European markets after Tether decided not to obtain a Markets in Crypto-Assets (MiCA) licence.
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MiCA came into force on 1 July and introduced new requirements for stablecoin issuers operating in the European Union. Circle, which holds the second‑largest market share, secured approval under the regime and said the licence would allow it to continue serving European users and expand euro‑denominated activity.
Circle has also continued to build out its infrastructure strategy as of late. The company acquired nearly one thousand issued patents from IBM’s portfolio, a deal it said would support the development of its on‑chain financial tools and strengthen the technology behind USDC.
While the specific patents have not been disclosed, Circle said the acquisition would help it compete as more traditional financial institutions and technology companies, including Sony, progress with their own stablecoin plans.
