Tether Made More Money Than BlackRock Last Year

Stablecoin issuer Tether made $6.2 billion in profit in 2023, which places it ahead of the world’s largest asset manager, BlackRock, by $700 million, reports the Wall Street Journal.

Even more notable is that Tether, the company behind USDT, barely cracks the 120-employee mark, while BlackRock has a 26,000-strong workforce as of August 2024.

USDT is crypto’s leading stablecoin by a wide margin, with a $118 billion market capitalization, which translates to a nearly 70% market share. Trailing from a distance is Circle’s USDC with $32 billion and DAI with $5 billion; although MakerDAO’s stablecoin is undergoing a massive transformation.

That’s not the only metric that USDT wins on. The stablecoin has generated more than $48 billion of trading volume in the past 24 hours. Bitcoin comes in a far second with $36 billion, and Ethereum lands third with $14 billion, according to CoinGecko.

Tether’s seemingly unassailable position leads to a twofold conclusion. It lays credence to the narrative that stablecoins are a real use case for crypto and that it has found product-market fit in the broader ecosystem. Secondly, Tether continues to be a dark horse for the industry, with longstanding questions regarding its reserves and how it actually mints more USDT.

Details to how Tether tokens are created are murky, with the website reading, “Tether Tokens are created by having multiple Tether private authorization keys sign and broadcast creation transactions on the specific blockchain. These new tokens are "authorized but not issued," meaning that these USDT are stored in Tether’s treasury and not in circulation until issued.”

Multiple reports have come out denouncing the position of Tether and how it could constitute crypto’s next house of cards, but until now, it has all been FUD (fear, uncertainty and doubt).

An Unlikely Partnership

Tron, the Layer 1 blockchain founded by Justin Sun, and Tether announced a new private initiative to fight illicit activity using USDT on Tron.

Both companies joined forces with cybersecurity firm TRM Labs, dubbing their new endeavor the T3 Financial Crime Unit (T3 FCU).

The move aims to combat what TRM Labs posited in a 2023 report that 45% of all illicit activity took place on Tron. USDT on Tron is the unequivocal powerhouse of the stablecoin market, with more than half of the stablecoin’s market cap living on Justin Sun’s blockchain.

The move is curious considering a recent report from Van Eck, which claims that transferring USDT from Tron to Ethereum is nearly impossible, mostly due to a blockade from both parties.

“We are also concerned about the general challenges facing USDT holders who want to off-ramp their tokens to fiat,” said Van Eck. USDT can be redeemed for dollars by only a few entities, and many holders are supposed to swap for USDC to offramp their USDT. Additionally, moving USDT from Tron to Ethereum is nearly impossible, adding to our concern of collusion between Sun and Tether to block exits for Tron’s USDT holders.”