How greedy do you have to be to look at that and say "yeah, well they could be getting bigger returns with an actively managed portfolio?"

I'm pretty sure Tether was holding less cash than they said multiple times, and at multiple points it was just a house of cards where they were inflating the price of BTC on their own, but I'm also guessing by now they've had made enough to cover.

Based on the Q2 2025 attestation [1] it looks like they have about 162B in assets and 157B in liabilities which leaves ~5B in shareholder equity. Even if they hold most of those assets in treasuries, they probably have an egregiously high return on shareholder equity.

(Fun fact: I think this puts their leverage ratio as high as banks during the 2008 GFC. But treasuries should theoretically be safer than subprime mortgage loans).

Equities would give a higher return on average, they don't really work when the liabilities can get called at any time. Tether has to be able to produce money for people exchanging their tether.

If you were in their position and I gave you 150 billion dollars on the condition that I can withdraw that 150 billion dollars at any time. You'd probably also park it in a short-term money market fund. If you put it in equities and it dropped 1%, you'd be on the hook for 1.5 billion.

[1] https://tether.io/news/tether-issues-20b-in-usdt-ytd-becomes...

US debt is about as stable as the dollar itself, so to their crypto customers buying bonds is a no-op. Any yield is pure profit for Tether itself.

They may have somewhat sketchily put money into bitcoin at times though.

There is a huge demand for dollars by individuals outside of the US. Countries where people do not really trust their banks and currencies.

Even in the Euro zone, most saving accounts will give you about 1% after taxes. So why not going with USDT, USDC or EURC and get about 5% on a relatively safe lending platform.

its just like your brokerage account, imagine if Schwab issued a stablecoin for every deposit someone made and only delete some of that stablecoin when they redeem

you'll find that people deposit and trade, they keep their balances there their entire life and beyond. when they trade, they are selling the stablecoin to someone else, someone else could redeem but they aren't either. stablecoins are liquid and useful, they have passive income capabilities while holding your principle value

so for Schwab's reporting, the balances always increase as people deposit more whenever they get their paycheck

this is what you're seeing with Tether, and all other leading stablecoins, as they grow at the same pace as they capture the same market

when actual traditional finance brokerage firms start issuing stablecoins, you'll see the same thing, the stablecoin just offers transparent real time behavior into their customer deposits

the only time stablecoin balances go down, and subsequently treasuries are offloaded behind the scenes, is when someone redeems a stablecoin for fiat currency. this isn't necessary, people don't want fiat or don't need to get fiat by redeeming it

Are you asking how laws work?

when tethers and trading at $1.04 or anything higher than $1.00

arbitrageurs wire money to their account at the Tether organization (bitfinex, otc services) to instruct the organization to mint Tether

the organization does everything necessary: takes the deposited money and buys US treasuries, mints the equivalent amount of Tethers and gives those tethers to the customer

The customer deposited $1 and received 1 tether. Some exchange venues have people rushing to buy 1 Tether for $1.04

Customer sells their tether to them and has some other form of crypto that they can try to get back into dollars and do it all over again, until flooding the market with Tether supply back to $1.00

this happens all day every day for a decade, more pronounced during panic selling periods

Otherwise I'm not sure how you can be so certain.