Stablecoin Issuer Revenue: How Tether, Circle, and Others Earn

Stablecoin Issuer Revenue Overview

Stablecoin issuers have become some of the most profitable companies in finance. The business model is deceptively simple: accept dollar deposits, issue tokens, invest the reserves in US Treasury bills, and keep the yield. With over $230 billion in combined stablecoin supply and short-term Treasury rates above 4%, the major stablecoin issuers collectively earn tens of billions of dollars per year in reserve income alone.

Yet profitability varies enormously across issuers. Tether reported $13 billion in profit for 2024, rivaling Goldman Sachs, while Circle earned just $157 million on $1.68 billion in revenue: the difference driven almost entirely by distribution costs. The following table summarizes the financial profiles of the largest stablecoin issuers based on publicly available data.

Tether's figures include $5 billion in unrealized gains on Bitcoin and gold holdings, which inflates the net income number beyond pure operating revenue. Circle's figures come from its S-1 filing with the SEC ahead of its June 2025 NYSE IPO. Paxos and Ethena are private and do not publish audited financials.

Revenue Sources: Where the Money Comes From

Stablecoin issuers generate revenue through several channels, but the overwhelming majority comes from a single source: interest earned on reserve assets. Understanding the breakdown reveals why the current interest rate environment has been so transformative for the industry.

Treasury Yield on Reserves

The primary revenue engine for every fiat-backed stablecoin issuer is the interest earned on reserve assets. When a user deposits $1 to mint a stablecoin, the issuer invests that dollar in short-term US Treasury bills yielding 4-5% annually. The issuer keeps the yield; the holder gets a non-interest-bearing token.

Circle's S-1 filing confirmed this concentration: over 99% of its $1.68 billion in 2024 revenue ($1.6 billion) came from reserve income. Only $15 million came from all other sources combined. Tether's reserve portfolio, which reached $113 billion in US Treasury exposure by year-end 2024, generated approximately $7 billion in operating income from Treasuries and repo agreements alone.

Redemption and Minting Fees

Issuers charge fees on direct redemptions (converting stablecoins back to fiat), though these represent a small fraction of total revenue. Fee structures vary significantly:

• Tether charges a 0.1% redemption fee (minimum $1,000) with a $100,000 minimum redemption amount, plus a $150 non-refundable verification fee for new accounts
• Circle uses tiered pricing: the first $40 million per day redeems free, $40-100 million at 2 basis points, and amounts above $100 million at 5 basis points
• Paxos allows free redemptions for USDP and PYUSD with no minimum, making it the most accessible for smaller holders

Most retail users never interact with direct redemption. Instead, they sell stablecoins on secondary markets (exchanges, DEXs), where the issuer earns nothing from the transaction. Direct redemptions matter primarily for institutional participants and authorized participants who arbitrage the peg.

Enterprise and API Fees

Circle generates a small amount of revenue from its Circle Mint API and enterprise services, but at $15 million in 2024, this remains negligible relative to reserve income. Paxos operates a white-label stablecoin issuance platform (used by PayPal for PYUSD) and charges licensing and infrastructure fees, though exact figures are not public.

Strategic Investments

Tether has diversified beyond Treasuries into Bitcoin, gold, and venture investments. In 2024, approximately $5 billion of Tether's $13 billion in total profit came from unrealized appreciation on these holdings. This is not operating revenue and depends on asset price movements, but it has become a meaningful component of Tether's overall financial picture.

Revenue Per Dollar of Stablecoin Issued

Comparing gross revenue per dollar of outstanding supply reveals the efficiency gap between issuers. Using 2024 data and approximate average circulating supply:

Tether and Circle earn comparable gross revenue per dollar issued (5-6 cents), which is consistent with both investing reserves in similar Treasury instruments at similar yields. The dramatic difference appears at the net income level: Tether retains nearly all of its gross revenue, while Circle passes roughly 60% to distribution partners. Circle paid $908 million to Coinbase alone in 2024 under their revenue-sharing agreement, plus a one-time $60.25 million fee to Binance.

Distribution Costs and Revenue Sharing

How issuers distribute their stablecoins determines how much revenue they keep. This is the single largest variable separating Tether's profitability from Circle's. For deeper context on the competitive dynamics, see our research on USDT vs USDC competitive dynamics.

Tether: No Revenue Sharing

Tether does not share reserve income with exchanges, wallets, or holders. It retains 100% of the yield generated on its reserves. USDT's dominance in trading volume and emerging market adoption means exchanges list it because their users demand it, not because Tether pays them to. This zero-distribution-cost model is the primary reason Tether's profit margins approach 100% on operating income.

Circle: Paying for Distribution

Circle's relationship with Coinbase is structured as a revenue share on USDC reserves. Coinbase receives 100% of the interest income on USDC held on-platform and a 50/50 split on USDC held off-platform (in DeFi, other exchanges, and wallets). In 2024, this cost Circle $908 million out of $1.68 billion in revenue. Circle's S-1 filing listed total distribution and transaction costs of $1.01 billion, leaving slim margins.

Paxos USDG: Partner Yield Distribution

Paxos launched USDG (Global Dollar) in late 2024 through its Singapore entity with a novel model: reserve yield is distributed to network partners including Robinhood, Anchorage, and Galaxy Digital. Partners receive the economics; end users do not earn yield directly. This inverts Circle's approach by making the revenue share the product's explicit value proposition rather than a cost of doing business.

Yield-Bearing Stablecoins

A growing category of yield-bearing stablecoins passes reserve income directly to holders, fundamentally changing the revenue model. PayPal began offering 3.7% APY on PYUSD balances in April 2025 to drive adoption. Ethena's sUSDe distributes 4.7-10% APY from funding rate and staking income. Ondo's USDY and Mountain Protocol's USDM pass through T-bill yields to holders. These models sacrifice issuer profitability for growth, betting that scale and ancillary services will generate returns over time. For a detailed comparison, see our stablecoin yield comparison tool.

Comparison with Traditional Financial Companies

Stablecoin issuer profitability becomes striking when compared to traditional financial institutions. Tether's 2024 profit of $13 billion (including investment gains) approached Goldman Sachs's $14.28 billion, yet Tether operates with a fraction of the headcount. In Q4 2023, Tether's quarterly profit of $2.85 billion actually exceeded Goldman Sachs's $1.87 billion.

Tether's profit-per-employee figure is orders of magnitude above any major financial institution. Even at the high end of employee estimates (250 people), Tether generated roughly $52 million in profit per employee in 2024. The stablecoin model requires no branches, no relationship managers, and no trading desks: just a reserve portfolio, a token contract, and a compliance team.

Interest Rate Sensitivity

The stablecoin issuer business model is almost entirely a bet on interest rates. When rates are high, issuers print money. When rates are near zero, the model barely works.

Circle's S-1 filing quantified this risk directly: a 1 percentage point decrease in interest rates would reduce its annual reserve income by approximately $441 million. For Tether, a similar calculation suggests a 50 basis point rate cut would cost roughly $600 million per year in lost income.

The 2020-2022 period illustrates the downside. With the federal funds rate near zero, stablecoin issuers earned minimal reserve income. Tether relied more heavily on commercial paper and riskier investments during this period. Circle operated at a loss. The post-2022 rate hiking cycle transformed stablecoin issuance from a marginal business into one of the most profitable segments in finance.

If the Federal Reserve returns to a near-zero rate environment, issuers would need to pivot toward fee-based revenue: higher redemption charges, enterprise API pricing, lending, or yield products. Some issuers are already diversifying. Tether has invested in Bitcoin, gold, AI infrastructure, and venture capital. Circle is building enterprise payment infrastructure through its CCTP (Cross-Chain Transfer Protocol) and Mint API. These hedges may help, but neither has demonstrated that non-reserve revenue can sustain current profitability.

Alternative Revenue Models

Not all stablecoin issuers follow the "hold Treasuries, keep the yield" playbook. Several alternative models have emerged:

Funding Rate Arbitrage: Ethena

Ethena's USDe earns revenue through a delta-neutral strategy: holding staked ETH while shorting ETH perpetual futures. The short position collects funding rate payments when the market is in contango (which it typically is). Ethena's protocol revenue exceeded $600 million in under two years, with a peak monthly revenue of $124 million in February 2024. The risk is that funding rates can turn negative during bearish markets, which would generate losses rather than revenue.

Stability Fees: MakerDAO/Sky

MakerDAO (now rebranded as Sky) earns revenue through stability fees: interest rates charged on collateralized debt positions. Users who borrow DAI or USDS against deposited collateral pay an ongoing fee. Approximately 70-80% of Sky's revenue comes from stability fees on real-world asset (RWA) collateral, with roughly half of total protocol revenue derived from Treasury bill allocations. The Sky Savings Rate, which launched at 9% in September 2024 and settled to 3.75-4% by mid-2026, distributes a portion of this revenue back to USDS holders.

White-Label Issuance: Paxos

Paxos operates as a stablecoin-issuance-as-a-service platform. It issues PYUSD on behalf of PayPal, previously issued BUSD for Binance, and launched USDG for its Global Dollar Network. Paxos earns licensing fees, infrastructure charges, and a share of reserve income from each white-label partnership. This model trades direct reserve yield for recurring platform revenue and reduces the risk of competing directly for supply growth.

Revenue Growth Trajectory

Stablecoin issuer revenue has grown rapidly alongside both supply expansion and rising interest rates. Tether's profits roughly doubled year over year: $6.2 billion in 2023 to $13 billion in 2024, then surpassing $10 billion in just the first three quarters of 2025. Circle's revenue grew from approximately $1.45 billion in 2023 to $1.68 billion in 2024, then accelerated to $2.7 billion in fiscal year 2025 as USDC circulation reached $75.3 billion.

The broader stablecoin supply trajectory suggests this revenue pool will continue expanding. If total stablecoin supply reaches $1 trillion (as multiple industry forecasts project by 2028), annual issuer revenue at current rates could exceed $40-50 billion per year: assuming rates remain elevated. This has attracted new entrants including PayPal, Robinhood, Revolut, and traditional banks exploring tokenized deposits as a competitive response.

For Bitcoin-native stablecoin settlement, protocols like Spark enable stablecoins such as USDB to operate directly on Bitcoin with instant, near-zero-fee transfers. As stablecoin issuers expand across chains, Bitcoin-native rails offer a settlement layer without the bridging risks associated with cross-chain transfers.

Regulatory Impact on Revenue

Emerging regulation could reshape stablecoin issuer economics. The US GENIUS Act and proposed state-level frameworks would require issuers to maintain 1:1 reserves in high-quality liquid assets. While Tether and Circle already do this voluntarily, mandated compliance costs (audits, licensing, reporting) would increase operating expenses. More significantly, some proposals contemplate requiring issuers to share reserve income with holders or restricting the types of reserve assets allowed, which could directly compress margins.

The EU's MiCA regulation, effective since 2024, already imposes capital requirements and reserve rules on stablecoin issuers operating in Europe. As more jurisdictions implement similar frameworks, the cost of regulatory compliance will become a meaningful line item, particularly for smaller issuers that lack the scale to absorb it. For a full breakdown of the reserve requirements, see our stablecoin reserve composition comparison.

Frequently Asked Questions

How do stablecoin issuers make money?

Stablecoin issuers primarily earn revenue by investing user deposits in short-term US Treasury bills and keeping the interest. When a user deposits $1 to mint a stablecoin, the issuer invests that dollar at the prevailing Treasury rate (currently 4-5% annually) and retains the yield. Additional revenue comes from redemption fees, enterprise API services, and in some cases strategic investments. For Tether and Circle, Treasury yield accounts for over 99% of operating revenue.

How much profit does Tether make per year?

Tether reported $13 billion in total profit for 2024, of which approximately $7 billion came from US Treasury and repo holdings. The remaining $5-6 billion came from unrealized gains on Bitcoin, gold, and other investments. In the first three quarters of 2025, Tether surpassed $10 billion in profit. These figures come from quarterly attestation reports by BDO, not from audited financial statements.

Why is Circle less profitable than Tether?

Circle's lower profitability is driven by distribution costs, not revenue generation. Circle pays Coinbase 100% of interest income on USDC held on-platform and splits 50/50 on off-platform USDC. In 2024, Circle paid $908 million to Coinbase out of $1.68 billion in total revenue. Tether retains 100% of its reserve yield because USDT's market dominance means exchanges list it without requiring revenue sharing. The gross revenue per dollar of stablecoin issued is similar for both (5-6 cents), but Tether keeps nearly all of it.

What happens to stablecoin issuer revenue if interest rates drop?

Stablecoin issuer revenue is highly sensitive to interest rates. Circle disclosed in its S-1 that a 1% rate decrease would reduce reserve income by approximately $441 million annually. At near-zero rates (as seen from 2020-2022), the reserve yield model generates minimal revenue, and issuers must rely on fees, lending, or other services. This is why some issuers are diversifying: Tether into Bitcoin and AI, Circle into enterprise payment infrastructure.

Do any stablecoin issuers share revenue with holders?

Traditional issuers like Tether and Circle do not share reserve income with token holders. However, a growing category of yield-bearing stablecoins does pass yield through. PayPal offers 3.7% APY on PYUSD. Ethena's sUSDe distributes 4.7-10% APY from funding rates. Ondo's USDY passes T-bill yields to holders. Paxos's USDG shares yield with distribution partners (exchanges and wallets) rather than end users. Regulatory clarity around whether yield-bearing tokens constitute securities remains an open question under frameworks like the CLARITY Act.

How does stablecoin issuer revenue compare to Visa or Mastercard?

Tether's $13 billion in 2024 profit exceeded Mastercard's ~$11.2 billion and approached Goldman Sachs's $14.28 billion. Visa led with $19.7 billion. The comparison is most striking on a per-employee basis: Tether generated $52-130 million in profit per employee (depending on headcount estimates of 100-250), compared to ~$657K for Visa and ~$315K for Goldman Sachs. Stablecoin issuance requires no physical infrastructure, no branch network, and minimal staff relative to traditional financial services.

Is Tether audited?

Tether publishes quarterly attestation reports prepared by BDO Italia, but these are not full financial audits. An attestation confirms that reserves exist at a point in time; an audit examines financial statements, internal controls, and ongoing operations. Circle, by contrast, publishes both monthly reserve attestations (by Deloitte) and audited annual financial statements as a public company following its June 2025 NYSE IPO. The distinction between attestation and audit is important when evaluating the reliability of reported revenue figures.

This tool is for informational purposes only and does not constitute financial advice. Revenue and profit figures are approximate, derived from attestation reports, SEC filings, and publicly available estimates. Tether's figures come from unaudited attestation reports, not audited financial statements. Always verify current data before making financial decisions.