How Stablecoin Issuers Make Billions From Reserves and Fees

Tether reported more than $10 billion in net profit in 2025 and Circle reported $2.7 billion in revenue the same year. Stablecoin issuers collect interest on deposited dollars held as reserves, charge fees on payments and conversions, and increasingly extract yield through integrations with decentralized finance protocols.

When users mint stablecoins, issuers receive dollars that are held in short-term instruments such as U.S. Treasuries, repo agreements and cash equivalents. With short-term yields near 4% to 5% in 2025, an issuer holding $1 billion in reserves would earn roughly $40 million to $50 million a year before expenses. USDT circulation stood near $184 billion and USDC near $79 billion in 2025; those reserve sizes drive large absolute interest income. Tether’s reserve mix also includes secured loans, gold and crypto, while Circle’s reserves are managed in a BlackRock-run fund with weekly disclosures.

Transaction and settlement fees add a second revenue stream. Stablecoins used for merchant payments, fiat conversions and cross-border transfers generate fees for issuers and for payment infrastructure firms. PayPal’s PYUSD grew supply by 726% in 2025 as native checkout flows and creator payouts produced payment-related revenue. Payment networks and processors also capture fees: a major card network runs stablecoin settlement programs at an annualized rate of about $4.5 billion, a card network supports broad merchant acceptance for card-linked stablecoin flows, and a payments technology firm operates bank-branded stablecoin rails across thousands of banks and millions of merchants. On-ramp providers process frequent transactions and handle billions in annual volume.

A third revenue layer comes from DeFi-linked strategies used by crypto-native and synthetic issuers. Protocols earn lending interest, liquidity provider fees, funding-rate differentials on derivatives and yields on tokenized real-world assets. Sky, the rebranded MakerDAO, charges stability fees on crypto-collateralized positions and receives yields from real-world asset allocations; combined USDS and DAI supply exceeded $15 billion. Ethena’s USDe operates delta-neutral positions across spot and futures to capture funding-rate spreads; USDe supply was about $5.9 billion.

Yield-bearing stablecoins pass part of reserve or strategy yield to holders and form a distinct product category. Variants such as sUSDe, sUSDS, USDB and sfrxUSD share yield with token holders rather than paying zero interest. These products narrowed issuer margins but supported fast supply growth in 2025: USDe rose roughly 145% and USDS about 74%. Other tokenized treasury products also saw rapid expansion.

Issuers incur operating costs for compliance, legal work, custody, banking relationships, technology, security audits, distribution revenue shares and risk management. Many of these costs are largely fixed, so margins typically improve as supply scales. Reaching billion-dollar supply thresholds changes the economics: reserve yield alone can produce tens of millions in annual revenue once an issuer reaches that scale.

The same economics can produce failures when reserves, liquidity or governance are weak. Documented failure modes include insufficient or unstable collateral, thin trading markets that accelerate depegs, loss of banking access or licenses, and protocol exploits that allow over-minting. Past instances include a large algorithmic stablecoin collapse, regulatory-driven wind-downs of regulated issuers, and protocol exploits that led to major losses.

Stablecoin issuance affects payments and treasury operations by enabling lower-cost cross-border transfers, near-instant settlement and on-chain treasury options. A wide range of fintech firms, banks, payment networks and DeFi protocols issued or expanded stablecoin programs in 2025, combining reserve yields, payment fees and DeFi activity to generate revenue.