Tether (USDT) published its attestation for the first quarter of 2026 on Friday, revealing a net profit of $1.04 billion. The report, prepared by global independent accounting firm BDO, showed that excess reserves increased to a record $8.23 billion in Q1, supported by continued profitability, albeit below the pace of its more than $10 billion in annual profit last year. However, the attestation provides a point-in-time snapshot of reserves as of March 31 and does not constitute a full financial audit.
Tether's reserves remain heavily concentrated in short-duration, high-quality liquid instruments, with about $141 billion exposure to U.S. Treasury bills as of March 31. That makes it one of the top 20 largest holders of U.S. Treasuries globally, alongside sovereign nations like Saudi Arabia and South Korea, and underscores its growing role in channeling demand for U.S. dollars. Beyond Treasuries, reserves include gold holdings valued at around $20 billion and bitcoin worth approximately $7 billion. 'The diversification reflects a deliberate balance between liquidity, resilience, and exposure to macro assets that perform under stress conditions,' the firm stated.
As of March 31, Tether's total assets stood at over $191.7 billion and its total liabilities at $183.5 billion, of which $183.4 billion relates to digital tokens issued, reflecting the $8.2 billion excess. Tether noted that its proprietary investments, held through Tether Investments, are not included in the reserves backing issued tokens and are funded from the company's excess capital and profits, fully segregated from USDT reserves.
'Our responsibility is to make sure USDT works without compromise,' Tether CEO Paolo Ardoino said in a statement. 'That means building a system that behaves the same way in any market condition, not just when things are stable.' USDT in circulation remained broadly stable during the first quarter, with total token-related liabilities of approximately $183 billion as of March 31. 'As of April, USDT continues to trade at or near all-time highs in circulation, with an increase of more than 5 billion USDT, reflecting sustained demand into the second quarter,' Ardoino added.
In parallel, USDT0, an omni-chain stablecoin token backed 1:1 by Tether's USDT, has rapidly grown into one of the most significant stablecoin solutions in the market. Created by Everdawn Labs with support from cross-chain infrastructure provider LayerZero and Tether, USDT0 has processed $86.7 billion in lifetime volume since its launch at the beginning of 2025. It has become the third-largest holder of USDT, trailing only Binance and OKX. USDT0's design leverages cross-chain technology to facilitate seamless transactions across 23 blockchains, including recent expansions to the Tempo network, a collaborative project between Stripe and Paradigm.
Notably, 99.2% of all USDT0 holders have wallets holding less than $1,000, with only a small fraction (about 1,200 wallets) holding between $100,000 and $1 million. This suggests that small, retail-scale transactions make up the bulk of the token's activity, challenging the crypto industry's growing institutional bias. Despite the predominance of small-scale holders, transfers above $1 million, though representing just 1.8% of cross-chain transactions, account for a staggering 68.8% of the total nominal transaction volume, demonstrating the critical importance of high-value transfers in maintaining capital flow.
USDT0's primary use cases have emerged in the DeFi sector, with decentralized exchanges (DEXs) and derivatives platforms seeing the strongest growth. Derivative volume using USDT0 hit $80 million in April. Another key function of USDT0 is to facilitate cross-chain transactions, with ongoing engagement from 'returning users' making up 70% of these bridge transactions. Lorenzo Romagnoli from Everdawn Labs emphasized that the main goal is not profitability but rather the removal of friction and the unification of liquidity across the crypto space. 'Our main goal has never been and will never be revenues. Our main goal is removing friction and unifying liquidity,' Romagnoli stated.
