Author: Mask
$160 billion market cap, 400 million users, the 18th largest holder of U.S. debt globally, this 'digital whale' is reshaping global financial flows.
Paolo Ardoino, CEO of Tether, the world's largest stablecoin issuer, solemnly announced on July 17: The market cap of USDT issued by the company has first surpassed $160 billion (approximately 1.1 trillion RMB). He excitedly referred to this as a 'stunning new milestone' on social media platform X.
Just two months ago, USDT had just crossed the $150 billion threshold, and this accelerated growth trend has caught the attention of the entire financial sector. In street shops in Argentina, cross-border traders in Vietnam, and remote workers in Africa, an increasing number of people are starting to use this 'digital dollar' for daily transactions and savings.
USDT has become an important tool for people in developing countries to combat local currency devaluation and obtain U.S. dollar assets, unknowingly infiltrating the capillaries of the global economy.
This cryptocurrency has surpassed the role of a mere transaction medium, becoming a core bridge connecting traditional finance and the crypto world, holding over 70% market share in stablecoins.
I. A decade of honing a sword, the rise of stablecoin leaders
USDT was born in 2014 when three founders, Brock Pierce, Reeve Collins, and Craig Sellars, seized the opportunity to launch a project called Realcoin, which was later renamed Tether (USDT). It is a cryptocurrency that is pegged to the value of the U.S. dollar at nearly 1:1 and was one of the earliest stablecoins, mainly serving cryptocurrency exchanges to provide traders with a safe haven from extreme market volatility.
Initially issued based on Bitcoin's Omni Layer protocol, USDT experienced a difficult startup phase. The turning point came in 2015 when a strategic partnership with the Bitfinex exchange provided it with a critical circulation channel.
Early development was not smooth. In 2017, the circulating USDT in the market was only about $400 million, and doubts were rampant, with many believing it was just a supporting role in the cryptocurrency market. In 2019, the New York Attorney General's office (NYAG) accused Tether of misappropriating reserves to cover an $850 million loss at the Bitfinex exchange, triggering a market trust crisis, which ultimately led to a $18.5 million settlement, after which Tether promised to regularly disclose the reserve composition.
However, with the popularization of blockchain technology and the surge in global digital payment demand, USDT has ushered in explosive growth. The year 2020 became a key turning point — the monthly on-chain transfer volume of USDT skyrocketed from $1.48 billion to $1.1 trillion, an increase of 7400%.
The number of users has shown geometric growth. Since 2020, the number of active users has surged from 2.8 million to 450 million, an increase of over 160 times. Now, Tether adds 35 million new wallets each quarter, primarily from emerging markets, and its stability mechanism has stood the test of severe challenges.
II. Global penetration, the 'financial lifeline' of emerging markets
For billions in emerging markets, USDT has become a true digital dollar.” Ardoino said this while announcing the milestone of $160 billion. Data shows that the number of global USDT users has surpassed 400 million.
In countries like Argentina, Nigeria, and Vietnam, USDT is becoming a financial refuge for ordinary people coping with local currency devaluation. In these high-inflation areas, holding USDT is equivalent to holding U.S. dollars, but with much lower entry thresholds than traditional banking systems.
The acceptance of USDT in Asia is particularly prominent, accounting for about 45% of global trading volume, while about 30%-40% of cryptocurrency transactions in Latin America use USDT. In Brazil, this proportion reaches 80%, while Africa accounts for about 10%-15%. In cross-border trade, overseas remittance, and small payments, USDT is rapidly replacing traditional financial channels due to its low cost and high efficiency.
In Korea's Dongdaemun market, about 10% of transactions have been completed using stablecoins, with USDT dominating. This adoption is due to its significant advantages:
・ Cross-border payment costs reduced from traditional banks' 2%-3% to below 0.5%
・ Transaction times reduced from several days to under 5 minutes
・ Access to U.S. dollar assets without a traditional bank account
Blockchain analysis shows that there are currently 165 million on-chain wallets holding USDT, with millions more users holding USDT on centralized exchanges. The number of active stablecoin wallets has increased by over 50% in the past 12 months, from 19.6 million to 30 million.
III. Technical foundation, the underlying reasons for Tron surpassing Ethereum
The blockchain infrastructure supporting this massive system is also undergoing significant changes. According to DefiLlama data, the issuance of USDT on the Tron chain has reached about $81 billion, surpassing Ethereum's $65 billion, becoming the main circulation network.
Technological characteristics determine the degree of adoption. The low transaction fees and fast settlement speeds of the Tron network make it particularly suitable for small, high-frequency trading scenarios, which are the core demands of users in emerging markets. In Africa and Southeast Asia, a single Ethereum network transaction fee can reach several dollars, while on Tron, it only costs a few cents.
The issuance scale of USDT on other blockchains is much smaller: $6.8 billion on BNB Chain, $2.3 billion on Solana, and $1.1 billion on Polygon.
To optimize resource allocation, Tether recently announced it would cease redeeming USDT on five traditional blockchains starting September 1, focusing resources on more scalable platforms.
The reserve structure shows that cash and cash equivalents (mainly short-term U.S. Treasury bonds) account for 81.5%, Bitcoin accounts for 5.1%, and other assets account for 13.4%. This diversified allocation enhances its risk resistance.
On the technical level, USDT has achieved multi-chain deployment:
・ Tron chain: approximately $81 billion in issuance
・ Ethereum: $65 billion
・ BNB Chain: $6.8 billion
・ Solana: $2.3 billion
・ Polygon: $1.1 billion
To enhance efficiency, Tether announced it would stop redeeming USDT on five traditional blockchains, including Omni Layer and Bitcoin Cash SLP, starting September 1, 2025, focusing resources on more scalable platforms.
IV. The mystery of reserves, the powerful backing of a trillion-dollar market cap
The credit supporting USDT comes from Tether's massive reserve assets. According to the latest verification, cash and cash equivalents (mainly short-term U.S. Treasury bonds) constitute 81.5% of USDT reserves, with Bitcoin accounting for 5.1%.
As of the second quarter of 2025, Tether holds more than $127 billion in U.S. Treasury bonds, making it the 18th largest holder of U.S. debt globally, alongside sovereign nations like Germany and South Korea. This figure leaves many Wall Street financial institutions in the dust.
Such a massive asset allocation has brought astonishing returns. In just the first quarter of 2025, Tether achieved over $1 billion in operating profit, with a total profit of up to $13 billion for the entire year of 2024, while the company has fewer than 200 employees, showcasing profitability per capita that leaves traditional financial institutions in the dust.
Despite its dominance, USDT faces numerous challenges, with its market share dropping from around 70% at the beginning of the year to about 60%, as competitors like USDC and BUSD are capturing market share.
Major risk points include:
・ De-pegging risk: briefly de-pegged to $0.98 due to market panic in September 2024
・ Regulatory pressure: the U.S. SEC is investigating its transparency and compliance
・ Technical vulnerabilities: blockchain security threats always exist
・ Trust crisis: issues with reserve transparency have repeatedly been questioned
Tether's response strategy focuses on technological innovation and application expansion, as the company promotes multi-chain deployment and cross-chain interoperability technologies to achieve seamless transfers between different blockchain ecosystems.
In the field of cross-border payments, Tether has reached partnerships with several financial institutions to promote its application in global payment networks. To meet market demand, Tether continues to issue USDT, minting over $4 billion in new coins within a week of surpassing $160 billion, including a single-day increase of $1 billion on July 16.
V. Regulatory watershed, the GENIUS Act reshapes the industry landscape
The barbaric growth of the stablecoin market is facing a regulatory turning point. On July 17, 2025, the same day USDT surpassed $160 billion, the U.S. House of Representatives passed the historic (GENIUS Act) with 308 votes in favor and 122 against, which was signed into law the next day by President Trump.
The act establishes the first federal regulatory framework for stablecoins in the U.S., requiring stablecoin issuers to operate with a license and maintain 100% reserves of highly liquid assets. It is expected to be signed into law by President Trump and poses compliance challenges for offshore issuers like Tether. Core requirements include:
・ Full reserve backing
・ Regular independent audits
・ Strict anti-money laundering compliance
Hong Kong is also set to pass the (Stablecoin Regulation Draft) in May 2025, with the first batch of stablecoin licenses expected to be announced by the end of 2025. These policy changes will reshape the industry landscape:
・ Compliance costs have significantly increased
・ Requirements for reserve transparency have increased
・Market access thresholds have been raised
This poses a significant challenge for Tether. Although the company has promised to comply with the new regulations and enhance transparency, its long-standing practice of providing only quarterly verifications without comprehensive independent audits has been heavily criticized.
Under regulatory pressure, Tether's market dominance faces challenges. It currently accounts for 73%* of stablecoin trading volume, but with the entry of compliant stablecoins like Ripple's RLUSD, the competitive landscape may be reshaped.
VI. The next decade, from hundreds of billions to trillions
Facing the new regulatory environment, Ardoino has shown remarkable ambition. After the signing of the GENIUS Act, he immediately announced plans to increase USDT supply tenfold to $1.6 trillion to 'solidify the global dominance of the U.S. dollar.'
In the trading field, USDT has accounted for 65% of stablecoin trading volume, becoming the base currency for over 900 trading pairs, with pairs like USDT/BTC and USDT/ETH contributing over 35% of global trading volume.
As the regulatory framework becomes clearer and technology matures, analysts predict three major trends:
・ Regulatory compliance: licensed operations become the norm, reserve transparency becomes a basic requirement
・ Asset diversification: More asset classes like gold and commodities are entering stablecoin reserves
・ Technological integration: breakthroughs in cross-chain technology will achieve seamless connections between different blockchain ecosystems
In application scenarios, RWA (real-world asset) tokenization has become a new hotspot. Companies like GCL-Poly Energy have attempted to tokenize the revenue rights of photovoltaic power plants, providing stable returns of 6.8%-8.7% annually.
HSBC has launched a gold token GTP, pegged to the London gold price, with a minimum trading amount of 0.001 ounces.
The reconstruction of cross-border payments will bring tremendous opportunities. USDT has reduced foreign trade settlement costs from the traditional 2%-3% to below 0.5%, giving A-share cross-border e-commerce companies like Huakai Yibai a significant cost advantage.
With the launch of Hong Kong's digital Hong Kong dollar and the issuance of stablecoin licenses, financial IT companies like Four Directions and Hang Seng Electronics are experiencing growth opportunities.
The global stablecoin market is witnessing explosive growth, with research firm Bernstein predicting that by 2035, the market size will reach $4 trillion, expanding 16 times from now. In this wave, Tether plans to expand its stablecoin supply tenfold to an astonishing $1.6 trillion.
Tether's ambitions extend beyond payments. The company is actively expanding into emerging fields such as AI computing, telecommunications services, and Bitcoin mining, attempting to build a broader digital ecosystem.
In the future, when cross-border payments become as simple as sending a text message, and U.S. dollar assets are no longer limited to bank accounts, the digital dollar era initiated by USDT will redefine the landscape of global finance. This trillion-dollar digital financial infrastructure is quietly changing the world financial pattern, heralding a silent revolution.
