Stablecoin Issuers Profit from Treasury Yields as Users Miss Out

Tether and Circle, the dominant players in the stablecoin market, are reaping billions in profits from U.S. Treasury holdings while token holders receive none of the yield. Tether’s Q2 2025 earnings report revealed a $4.9 billion net profit, fueling debate over equitable profit distribution in the $500 billion stablecoin ecosystem.

Emerging platforms like M^0 and Agora are challenging this model by designing protocols that share yield directly with users or decentralized applications. "Stablecoin holders are subsidizing issuers’ risk-free returns," noted Dan Reecer of Wormhole at Mercado Bitcoin’s DAC 2025 summit, highlighting the growing demand for transparent yield mechanisms.

The disconnect between issuer profits and user benefits has become increasingly untenable as interest rates remain elevated. New stablecoin architectures now prioritize yield redistribution, signaling a potential paradigm shift in how these digital assets create value for holders beyond mere price stability.