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Tether generates its revenue by collecting interest on the assets it holds to back USDT, the world's largest stablecoin.
The mechanism is straightforward: when USDT is minted, Tether takes in dollars or equivalent assets and deploys the bulk of those reserves into short-term U.S. Treasury bills and other low-risk instruments.
The yield on those holdings, not fees on transactions, is the core of the company's business model.
How Reserve Deployment Works Each time a new USDT token enters circulation, Tether receives a corresponding dollar-denominated deposit.
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