Author: Mask
With a market value of $160 billion, 400 million users, and being the 18th largest holder of U.S. Treasury bonds globally, this "digital giant" is reshaping global financial flows.
On July 17, Paolo Ardoino, CEO of the world's largest stablecoin issuer Tether, solemnly announced that the market value of USDT has surpassed $160 billion (approximately 1.1 trillion RMB) for the first time. He excitedly referred to this as a "stunning new milestone" on the social platform X.
Just two months ago, USDT had only crossed the $150 billion threshold, and this accelerated growth has caught the attention of the entire financial sector. In street shops in Argentina, cross-border traders in Vietnam, and remote workers in Africa, an increasing number of people are starting to use this "digital dollar" for daily transactions and savings.
USDT has become an important tool for people in developing countries to combat currency devaluation and acquire dollar assets, and has unknowingly infiltrated the capillaries of the global economy.
This digital currency has transcended its role as a mere medium of exchange, becoming a core bridge connecting traditional finance and the crypto world, holding over 70% of the stablecoin market share.
I. A Decade in the Making: The Rise of the Stablecoin Leader
USDT was born in 2014 when three founders, Brock Pierce, Reeve Collins, and Craig Sellars, seized the opportunity to launch a project called Realcoin, which was later renamed Tether (USDT). It is a cryptocurrency pegged to the value of the U.S. dollar at nearly a 1:1 ratio. As one of the earliest stablecoins, USDT initially served cryptocurrency exchanges, providing traders with a safe haven from market volatility.
Initially issued on the Bitcoin-based Omni Layer protocol, USDT went through a difficult startup phase. A turning point came in 2015 when a strategic partnership with the Bitfinex exchange provided it with a crucial circulation channel.
Early development was not smooth; by 2017, the circulating USDT was only about $400 million, and skepticism was rampant, with many believing it was merely a minor player in the cryptocurrency market. In 2019, the New York Attorney General's office (NYAG) accused Tether of misappropriating reserves to cover an $850 million loss at Bitfinex, triggering a crisis of trust in the market. Ultimately, after settling for $18.5 million, Tether promised to regularly disclose its reserve composition.
However, with the popularization of blockchain technology and a surge in global digital payment demand, USDT experienced explosive growth, with 2020 marking a critical turning point—USDT's monthly on-chain transfer volume skyrocketed from $1.48 billion to $1.1 trillion, an increase of 7400%.
The number of users also exhibited geometric growth, with active users increasing from 2.8 million to 450 million since 2020, a growth of over 160 times. Today, Tether adds 35 million new wallets each quarter, primarily from emerging markets, and its stability mechanism has withstood severe tests.
II. Global Penetration: The "Financial Lifeline" for Emerging Markets
"For billions of people in emerging markets, USDT has become a true digital dollar," Ardoino stated when announcing the $160 billion milestone. Data shows that the number of people using USDT globally has surpassed 400 million.
In countries like Argentina, Nigeria, and Vietnam, USDT is becoming a financial haven for ordinary people facing currency devaluation. In these high-inflation areas, holding USDT is equivalent to holding dollars, but the barriers are much lower than those of traditional banking systems.
The acceptance of USDT is particularly prominent in Asia, accounting for about 45% of global trading volume, while approximately 30%-40% of cryptocurrency transactions in Latin America use USDT. In Brazil, this figure reaches as high as 80%, and in Africa, it accounts for about 10%-15%. In the fields of cross-border trade, overseas remittances, and small payments, USDT is rapidly replacing traditional financial channels due to its low cost and high efficiency.
In South Korea's Dongdaemun market, about 10% of transactions are completed using stablecoins, with USDT dominating. This adoption stems from its significant advantages:
- Cross-border payment costs have dropped from 2%-3% with traditional banks to below 0.5%
- Transaction times have shortened from several days to under 5 minutes
- Dollar assets can be obtained without a traditional bank account
Blockchain analysis shows that there are currently 165 million on-chain wallets holding USDT globally, with millions more holding USDT on centralized exchanges. The number of active stablecoin wallets has grown by over 50% in the past 12 months, from 19.6 million to 30 million.
III. Technical Foundation: The Reasons Behind Tron Surpassing Ethereum
The blockchain infrastructure supporting this vast system is also undergoing significant changes. According to DefiLlama data, the issuance of USDT on the Tron chain has reached approximately $81 billion, surpassing Ethereum's $65 billion, making it the primary circulation network.
Technical characteristics determine the level of adoption; the low transaction fees and fast settlement speeds of the Tron network make it particularly suitable for small, high-frequency trading scenarios, which is a core demand of users in emerging markets. In Africa and Southeast Asia, a transaction fee on the Ethereum network can reach several dollars, while on Tron, it only costs a few cents.
The issuance scale of USDT on other blockchains is much smaller: $6.8 billion on BNB Chain, $2.3 billion on Solana, and $1.1 billion on Polygon.
To optimize resource allocation, Tether recently announced that starting September 1, it will stop redeeming USDT on five traditional blockchains, including Omni Layer and Bitcoin Cash SLP, focusing resources on more scalable platforms.
The reserve structure shows that cash and cash equivalents (mainly short-term U.S. Treasury bonds) account for 81.5%, Bitcoin accounts for 5.1%, and other assets account for 13.4%. This diversified allocation enhances its risk resistance.
On a technical level, USDT has achieved multi-chain deployment:
- Tron chain: approximately $81 billion in issuance
- Ethereum: $65 billion
- BNB Chain: $6.8 billion
- Solana: $2.3 billion
- Polygon: $1.1 billion
To improve efficiency, Tether announced that starting September 1, 2025, it will stop redeeming USDT on five traditional blockchains, including Omni Layer and Bitcoin Cash SLP, concentrating resources on more scalable platforms.
IV. The Mystery of Reserves: The Strong Backing of a Trillion-Dollar Market Value
The credit supporting USDT comes from Tether's vast reserve assets. According to the latest proof, cash and cash equivalents (mainly short-term U.S. Treasury bonds) constitute 81.5% of USDT reserves, with Bitcoin accounting for 5.1%.
As of the second quarter of 2025, Tether holds over $127 billion in U.S. Treasury bonds, making it the 18th largest holder of U.S. debt globally, alongside sovereign nations like Germany and South Korea. This figure leaves many Wall Street financial institutions in the dust.
Such a massive asset allocation brings astonishing returns; in just the first quarter of 2025, Tether achieved over $1 billion in operating profit, with the total profit for 2024 reaching $13 billion, all with fewer than 200 employees, making its per capita profit-generating capability overshadow traditional financial institutions.
Despite its dominant position, USDT faces multiple challenges, with its market share declining from around 70% at the beginning of the year to about 60%, as competitors like USDC and BUSD are capturing market share.
Key risk points include:
- De-pegging risk: briefly de-pegged to $0.98 due to market panic in September 2024
- Regulatory pressure: the U.S. SEC is investigating its transparency and compliance
- Technical vulnerabilities: blockchain security threats always exist
- Trust crisis: the transparency of reserves has been repeatedly questioned
Tether's response strategy focuses on technological innovation and application expansion. The company is advancing multi-chain deployment and cross-chain interoperability technology to achieve seamless transfers between different blockchain ecosystems.
In the field of cross-border payments, Tether has partnered with multiple financial institutions to promote its application in global payment networks. Moreover, to meet market demand, Tether continues to issue new USDT, minting over $4 billion in new coins within a week of surpassing $160 billion, including a single-day issuance of $1 billion on July 16.
V. Regulatory Watershed: The GENIUS Act Reshapes the Industry Landscape
The wild growth of the stablecoin market is approaching a regulatory turning point. On the same day that USDT surpassed $160 billion, July 17, 2025, the U.S. House of Representatives passed the historic GENIUS Act with a vote of 308 in favor and 122 against, which was signed into law by President Trump the following day.
This act establishes the first federal regulatory framework for stablecoins in the U.S., requiring stablecoin issuers to operate with a license and maintain 100% reserves of highly liquid assets. It is expected to pose compliance challenges for offshore issuers like Tether. Core requirements include:
- Full reserve backing
- Regular independent audits
- Strict anti-money laundering compliance
Hong Kong also passed the Stablecoin Regulation Draft in May 2025, with the first batch of stablecoin licenses expected to be announced by the end of 2025. These policy changes will reshape the industry landscape:
- Significant increase in compliance costs
- Higher transparency requirements for reserves
- Increased market entry barriers
This poses a significant challenge to Tether. Although the company has committed to complying with the new regulations and enhancing transparency, its long-standing practice of only providing quarterly attestations without comprehensive independent audits has been heavily criticized.
Under regulatory pressure, Tether's market dominance is facing challenges. It currently accounts for 73%* of stablecoin trading volume, but with the entry of compliant stablecoins like Ripple's RLUSD, the competitive landscape may be reshaped.
VI. The Next Decade: The Journey from Hundreds of Billions to Trillions
In the face of the new regulatory environment, Ardoino has shown remarkable ambition. Following the signing of the GENIUS Act, he immediately announced plans to increase the supply of USDT tenfold to $1.6 trillion to "consolidate the global dominance of the dollar."
In the trading sector, USDT has captured 65% of stablecoin trading volume, becoming the base currency for over 900 trading pairs. Trading pairs like USDT/BTC and USDT/ETH contribute to over 35% of global trading volume.
With the regulatory framework clarified and technology maturing, analysts predict three major trends:
Regulatory Compliance: Licensed operations will become the norm, and reserve transparency will be a basic requirement.
Asset Diversification: More asset classes, such as gold and commodities, will enter stablecoin reserves.
Technological Integration: Breakthroughs in cross-chain technology will enable seamless connections between different blockchain ecosystems.
In terms of application scenarios, the tokenization of RWA (Real World Assets) has become a new hotspot. Companies like GCL-Poly Energy have attempted to tokenize the revenue rights of photovoltaic power plants, offering stable returns of 6.8%-8.7% annually.
HSBC has launched a gold token, GTP, pegged to the London gold price, with a minimum tradeable amount of 0.001 ounces.
The reconstruction of cross-border payments will bring enormous opportunities. USDT has reduced foreign trade settlement costs from the traditional 2%-3% to below 0.5%, giving A-share cross-border e-commerce companies like Huakai Yibai a significant cost advantage.
With the launch of the Hong Kong digital Hong Kong dollar and the issuance of stablecoin licenses, financial IT companies like Sifang Jingchuang and Hang Seng Electronics are experiencing business growth.
The global stablecoin market is poised for explosive growth, with research firm Bernstein predicting that by 2035, the market size will reach $4 trillion, expanding 16 times from its current size. In this wave, Tether plans to expand its stablecoin supply tenfold to an astonishing $1.6 trillion.
Tether's ambitions extend beyond the payment sector; the company is actively exploring emerging fields such as AI computing, telecommunications services, and Bitcoin mining, attempting to build a broader digital ecosystem.
In the future, when cross-border payments become as simple as sending a text message, and dollar assets are no longer confined to bank accounts, the digital dollar era pioneered by USDT will redefine the global financial landscape. This trillion-dollar digital financial infrastructure is quietly changing the world financial order, and a silent revolution has already arrived.
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