2025-10-22 23:40 |
Tether announced on October 21, 2025, that its USDT stablecoin has reached 500 million users for the first time. CEO Paolo Ardoino called this milestone “likely the biggest financial inclusion achievement in history” in a post on X. The announcement comes as USDT’s total supply approaches $182 billion, making it by far the dominant player in the stablecoin market.
The timing of this announcement is significant. On the same day, Tether revealed a strategic investment in Kotani Pay, a Kenya-based fintech company that connects cryptocurrency users to local payment systems across Africa. This move shows where Tether sees its future growth: emerging markets where traditional banking remains limited.
Explosive Growth in Developing RegionsTether’s user base has grown at a remarkable pace. In March 2025, the company had just surpassed 400 million users. That means it added 100 million users in roughly seven months. Much of this expansion happened in developing countries where USDT serves as a tool for everyday transactions and savings.
According to Ardoino, 37% of USDT users treat the stablecoin as their savings account because they lack access to local banks. In countries facing high inflation or currency instability, holding digital dollars offers protection that local currencies cannot provide.
Source: @paoloardoino
The Africa investment fits this pattern. Between July 2024 and June 2025, cryptocurrency transaction volume in Sub-Saharan Africa exceeded $205 billion, representing a 52% increase from the previous year. Nigeria, Kenya, South Africa, and Ethiopia lead this growth, with users turning to stablecoins for remittances and cross-border payments.
Financial Performance and Market PositionTether’s business generates substantial profits. The company reported a profit of $4.9 billion in Q2 2025 alone, bringing its first-half earnings to $5.7 billion. Most of this came from operational earnings, with additional gains from Bitcoin and gold holdings.
The stablecoin issuer now holds over $127 billion in U.S. Treasury securities, making it one of the largest holders of U.S. government debt globally. If Tether were a country, it would rank 18th among U.S. Treasury holders.
Despite this financial strength, Tether’s market dominance shows signs of erosion. While USDT remains the clear leader with $182 billion in circulation, its market share dropped from 70% in November 2024 to 59.9% by October 2025. Circle’s USDC grew from $24.3 billion to $76.3 billion during the same period, while newer competitor Ethena’s USDe reached $12.2 billion from nearly zero.
The absolute numbers tell a different story. Tether added nearly $50 billion in new supply between November 2024 and October 2025. The market is expanding rapidly, and competitors are growing faster in percentage terms, but USDT continues adding billions in absolute value.
Regulatory Challenges and AdaptationEurope’s Markets in Crypto-Assets (MiCA) regulation created obstacles for Tether. Major European exchanges delisted or restricted USDT trading pairs by April 2025 because the stablecoin did not meet MiCA compliance requirements. This regulatory pressure helped boost USDC’s market share, as it quickly obtained the necessary licenses.
Tether responded with a two-pronged strategy. The company invested in StablR and Quantoz, European stablecoin issuers that operate under proper licenses. This allows Tether to maintain influence in European markets without directly exposing USDT to regulatory risk.
More significantly, Tether announced plans for USAT, a U.S.-regulated stablecoin designed to comply with the GENIUS Act. The company appointed Bo Hines, former Executive Director of the Presidential Council of Advisers for Digital Assets, as CEO of its U.S. division. USAT is expected to launch by the end of 2025.
Expansion Beyond StablecoinsTether has been diversifying aggressively. The company raised $200 million to create a gold treasury company focused on Tether Gold (XAUt), which crossed $1 billion in value on October 1, 2025. Each XAUt token represents one ounce of physical gold stored in Swiss vaults.
The company has also deployed approximately $4 billion into U.S.-based technology investments through Tether Investments and XXI Capital. The largest single investment was $775 million in video platform Rumble. Other investments target artificial intelligence, renewable energy, and open-source infrastructure.
Additionally, Tether is exploring a potential $1.17 billion acquisition of Northern Data, a German AI infrastructure company, in partnership with Rumble. This would transform Tether from purely a stablecoin issuer into a major cloud computing provider.
The Valuation QuestionBloomberg reported in September 2025 that Tether is in talks to raise up to $20 billion at a $500 billion valuation. This would place the company alongside tech giants like OpenAI and SpaceX as one of the most valuable private companies globally. The fundraising would involve selling roughly 3% of the company without diluting existing shareholders.
Whether investors will pay such a premium remains uncertain. Tether operates in a profitable but controversial space. The company has faced persistent questions about reserve transparency throughout its history and settled with U.S. regulators in 2021 over past statements about its backing.
Bottom LineTether’s growth to 500 million users demonstrates the genuine demand for dollar-based stablecoins in regions with limited banking access and unstable currencies. The company maintains its position as the stablecoin leader through aggressive expansion in emerging markets, substantial financial resources, and strategic diversification. However, regulatory pressure in developed markets and rising competition from compliant alternatives like USDC suggest the stablecoin landscape is becoming more complex. Tether’s ability to navigate these challenges while maintaining its grassroots adoption advantage will determine whether it can sustain its dominance.
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