Tether’s Balance Sheet Resembles Central Bank Operations

Tether’s operations increasingly mirror those of a central bank, moving beyond a simple stablecoin issuer. Its balance sheet, holding $181.2 billion in reserves against $174.5 billion in liabilities, leaves a $6.8 billion excess. This has generated over $10 billion in interest income in 2025 due to high interest rates, a figure atypical for a crypto issuer.

Tether demonstrates central bank-like behavior through several actions. It manages money supply through minting and redemption, manages reserves with a focus on short-term US Treasurys and reverse repos, and earns income resembling seigniorage, amassing $6.8 billion in excess reserves. Furthermore, it freezes wallets linked to sanctions and has discontinued support for several blockchains to manage operational risk.

The company’s transformation extends beyond stablecoin issuance. In April 2024, Tether reorganized into four divisions: Tether Finance, Tether Data, Tether Power, and Tether Edu, signaling a broader focus on digital asset services, data ventures, energy initiatives, and education.

Recent initiatives include Volcano Energy in El Salvador, a wind and solar park powering Bitcoin mining operations, and the planned launch of USAT, a US-regulated dollar token issued by Anchorage Digital Bank, alongside its existing USDT.

However, Tether differs from a traditional central bank. It lacks a public mandate, relies on attestations instead of full audits, and depends on private counterparties. Its policy-like actions are primarily compliance-focused rather than macroeconomic management.

Critics point to Tether’s reliance on attestations and past maintenance of a secured loan portfolio as reasons to question the “central bank” analogy. Despite these differences, Tether’s scale and influence make it a significant player in the crypto economy. Developments surrounding reserve composition, profits, audit progress, and the USAT launch warrant close monitoring.

Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility.