Revenue Generation for Circle and Tether
Circle (issuer of USDC) and Tether (issuer of USDT) are the two largest stablecoin providers and generate revenue primarily by earning yield on the reserves that back their stablecoins
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Primary Revenue Source: Reserve Yield
The core of both companies' revenue generation is the interest earned from holding the assets that collateralize their stablecoins
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- Mechanism: When users mint stablecoins (USDC or USDT), they deposit fiat currency (like USD) with the issuer. The issuer then invests these reserves, typically in low-risk, short-term securities 3.
- Assets: These reserves are often parked in short-term U.S. Treasury bills, bank deposits, money market funds, and commercial paper 3, 4.
- Profitability: The Federal Reserve's tightening monetary policy, which led to rising interest rates, has made this model highly lucrative, as the firms pocket most, if not all, of the yield generated by these securities 3, 4. For example, a chart analysis suggested that Circle could generate over $300 million annually from interest on treasury bills when yields were around 4% 4.
Tether's Revenue Strategy
Tether's financial activities are characterized by high profitability and a broader, less transparent investment strategy compared to Circle
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- Dominance and Profitability: Tether (USDT) leads the stablecoin market in revenue, reporting $598.7 million in 30-day revenue as of July 2025 1. In 2024, Tether's gross profit reached $13 billion, which was approximately 8,000% greater than Circle's net income 5.
- Investment Scope: Tether operates more like a private investment fund, allocating reserves into a diverse range of assets, including money market funds, commercial paper, bank deposits, corporate bonds, gold, Bitcoin, and secured loans 3.
- Cost Efficiency: Tether reportedly avoids significant distribution costs, which contributes to its higher profitability compared to Circle 5.
- Market Share: Tether's dominance is particularly strong on the Tron blockchain, where it is widely used as an international digital eurodollar 6.
Circle's Revenue Strategy
Circle (USDC) is a US-based company subject to stricter regulations and has a more detailed financial disclosure, especially as it prepares for a potential IPO
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- Revenue Growth: Circle's revenue and reserve income grew 1900% since 2021, with a sharp increase in Q4 2024 7. As of July 2025, Circle's 30-day revenue was $191.8 million 1.
- Reserve Management: Circle's revenue is heavily tied to the interest earned on its USDC reserves, which are primarily held in U.S. government securities 4.
- Fee Adjustments: To offset reduced revenue during periods of lower interest rates, Circle has increased fees for cashing out USDC, charging 0.03% to 0.1% per transaction for large redemptions 8.
- Distribution Costs: Unlike Tether, Circle incurs significant distribution costs, including paying over $900 million to Coinbase for stablecoin distribution, which impacts its net profitability 5.
Comparative Revenue Data
Stablecoin issuers dominate crypto revenue, with Tether and Circle commanding nearly 90% of the stablecoin market
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