Why Tether operates more like a central bank than a stablecoin
Once a simple stablecoin issuer, Tether now reflects the mechanisms of a central bank with reserves, profits, and policy-like decisions.
Key points to remember
Tether operates a balance sheet leaning towards Treasury and repo, holding $181.2 billion in reserves against $174.5 billion in liabilities, leaving $6.8 billion.
High interest rates have turned those reserves into profits, generating over $10 billion in interest so far in 2025, which is quite unusual for a typical cryptocurrency issuer.
It uses policy-style leverage by freezing approved wallets, transferring supported blockchains, and allocating up to 15% of profits to Bitcoin.
The comparison to a central bank has its limitations. Tether lacks public authorization or support, relies on attestations rather than full audits, and depends on private partners.
Tether no longer resembles a mere stablecoin company. It operates a dense balance sheet of short-term U.S. Treasury bonds, reverse repurchase agreements, gold, and even Bitcoin. It mints and exchanges dollars on a large scale and can freeze addresses at the request of law enforcement.
The latest attestation shows reserves of $181.2 billion against $174.5 billion in liabilities, with $6.8 billion remaining and over $174 billion USD.
