Tether closed a $600 million funding round in November 2024, led by Cantor Fitzgerald, which acquired approximately a 5% stake in the company. This transaction implies a valuation of approximately $12 billion for the stablecoin issuer.

The Cantor Fitzgerald investment is the largest disclosed funding round in Tether's history. Before this round, the company primarily operated without significant external capital, funding its operations through retained earnings generated by its reserve management activities.

The partnership with Cantor Fitzgerald includes roles beyond capital investment. Cantor Fitzgerald acts as the custodian for a substantial portion of Tether's US Treasury holdings and will oversee reserves for Tether's planned US-compliant stablecoin, USAT.

Tether's total disclosed funding to date is approximately $600 million. The company's capital-light business model has required limited external investment relative to its revenue scale and market presence.

Tether issues blockchain-based tokens that track real-world assets on a 1-to-1 basis. USDT, pegged to the US dollar, constitutes the majority of Tether's token supply. The company also offers EUR₮ (euro), MXN₮ (Mexican peso), CNH₮ (offshore yuan), and XAU₮ (tokenized gold).

The product operates as digital cash that can be transferred across borders instantly. For example, when an institutional customer wires $100,000 to Tether's bank account, the company mints an equivalent amount of USDT tokens and transfers them to the customer's specified blockchain address. To redeem, customers return the tokens to Tether, which burns them and wires back the corresponding cash amount.

USDT is available on over 15 public blockchains, including Ethereum, Tron, Solana, TON, Avalanche, and various Layer 2 networks. Users select blockchains based on their speed and fee preferences. For instance, Tron offers sub-penny transaction costs, while Ethereum provides higher liquidity and integration with decentralized finance (DeFi) protocols.

For retail users, USDT serves as a hedge against local currency inflation, a low-cost option for cross-border payments, and a bridge between DeFi protocols. Integration with Telegram's TON blockchain has simplified USDT transfers, enabling nearly 900 million Telegram users to send tokens as easily as sharing a photo in chat.

The company has also introduced Alloy, a platform for synthetic assets. Its first token, aUSDT, is backed by Tether Gold, allowing users to maintain exposure to gold while transacting with a dollar-pegged asset.

Tether operates as a reserve-backed stablecoin issuer with a B2B2C go-to-market model. Institutional customers mint and redeem tokens directly with Tether, while retail users access USDT through exchanges, wallets, and applications.

The business model relies on float management rather than traditional software licensing. When customers deposit dollars, Tether invests those funds primarily in US Treasuries and other cash equivalents, earning interest income on the spread between what it pays depositors (zero) and what it earns on investments.

Minimum transaction sizes of $100,000 and 0.1% fees on both minting and redemption create barriers that limit retail users to the secondary market. This structure enables Tether to prioritize large institutional flows while maintaining retail adoption through third-party platforms.

The company's cost structure is highly lean, with minimal technology infrastructure requirements compared to traditional fintech companies. Most operational expenses are tied to compliance, auditing, and reserve management rather than software development or customer acquisition.

Tether benefits from network effects and liquidity concentration. As USDT adoption increases, it becomes more functional for merchants, exchanges, and DeFi protocols, which drives additional adoption and supports larger reserve balances that generate higher interest income.

Circle is Tether's primary competitor, with USDC maintaining approximately $72 billion in circulation compared to Tether's $169 billion. Circle markets itself as a compliance-focused alternative, offering monthly attestations, full reserve backing, and pursuing a pending IPO with a targeted valuation of nearly $6 billion.

Circle's Cross-Chain Transfer Protocol facilitates native burns and mints across 14 chains, directly competing with Tether's multi-chain strategy. The company has established enterprise agreements with Fortune 500 firms for FX, payroll, and treasury management, leveraging its regulatory clarity and US-based operations.

PayPal has entered the market with PYUSD, utilizing its 430 million wallet users and offering 3.7% rewards for holding the stablecoin. Integration with PayPal's existing commerce infrastructure introduces competition for Tether in consumer-facing use cases, where USDT has limited adoption.

Ripple has introduced RLUSD as an enterprise-grade stablecoin with monthly attestations, targeting bank corridors and XRPL settlement. Ripple's established relationships with financial institutions provide a distribution model distinct from Tether's crypto-first strategy.

First Digital issues FDUSD, which Binance has adopted as its preferred replacement for the discontinued BUSD. While the token has gained traction through exchange partnerships, it faces scrutiny over reserve transparency following brief depegging incidents.

MakerDAO's DAI offers a decentralized option backed by crypto collateral rather than fiat reserves. Although smaller in scale, DAI attracts users who prioritize decentralization and censorship resistance over the stability provided by fiat backing.

Ethena's USDe employs delta-neutral strategies to maintain its peg without relying on traditional reserves. These synthetic stablecoins compete by offering yield to holders while maintaining dollar stability.

Tether plans to launch USAT, a US-domiciled stablecoin, by the end of 2025. Issued through Anchorage Digital and managed by Cantor Fitzgerald, USAT is designed to comply with the GENIUS Act. This regulatory-compliant token would enable access to US payments, payroll, and treasury markets, areas that USDT has largely avoided due to regulatory constraints.

The Alloy platform facilitates the creation of synthetic assets beyond traditional stablecoins. Its first token, aUSDT, allows users to maintain gold exposure while transacting with a dollar-pegged asset. This functionality establishes a foundation for additional collateral types, including yield-bearing Treasuries and tokenized real-world assets.

Tether's Hadron infrastructure supports MiCA-compliant tokens for partner Quantoz and enables tokenization of short-term Treasuries, commodities, and trade receivables. This real-world asset (RWA) tokenization stack is designed to address higher-margin enterprise use cases beyond standard stablecoin issuance.

Integration with Telegram's TON blockchain provides access to nearly 950 million users, with over 1 million TON addresses currently holding USDT. Telegram Wallet reports more than 6 million monthly active users, offering significant potential for digital dollar adoption.

Regional currency stablecoins such as MXN₮ and CNH₮ cater to exporters, gig workers, and remitters in Latin America and Asia who seek lower-volatility alternatives to local fiat currencies. Chinese e-commerce exporters, in particular, use CNH₮ as a dollar substitute for cross-border trade settlement.

Merchant payment adoption has driven USDT's share of stablecoin payment volume from 13% in January 2024 to 70% by mid-2025. Integration with e-commerce platforms and point-of-sale systems expands access to small businesses seeking cryptocurrency payment solutions.

Tether has committed over $1 billion in equity investments to renewable-powered bitcoin mining projects in El Salvador, Uruguay, and Paraguay. These investments establish a physical presence and foster political relationships in key Latin American markets, creating infrastructure for broader financial services expansion.

The company's renewable energy investments support both mining operations and electrification projects in emerging markets. This infrastructure development aligns with regional efforts to achieve energy independence and positions Tether as a broader financial services provider.

Partnerships with local financial institutions and payment processors in emerging markets aim to accelerate USDT adoption for remittances and local commerce. These efforts are particularly relevant in countries experiencing high inflation or capital controls.

Regulatory pressure: Stablecoin regulations, such as the GENIUS Act in the US and MiCA in Europe, could impose operational restrictions or necessitate costly compliance measures for Tether. A lack of regulatory reciprocity for foreign issuers may result in Tether losing access to key markets, potentially giving domestic competitors like Circle a competitive edge.

Reserve transparency: Although Tether undergoes regular attestations, concerns remain regarding the quality and liquidity of its reserves, particularly during periods of market stress. Any disclosure indicating reserve inadequacy or an inability to meet redemption requests could erode confidence in USDT and trigger a run on the token.

CBDC competition: Central bank digital currencies (CBDCs) present state-backed alternatives that may diminish demand for private stablecoins. If major economies introduce CBDCs with functionality comparable to USDT but with government support, Tether could experience heightened competitive pressure and a decline in market share.