Tether’s flagship stablecoin USDt ended the fourth quarter of 2025 at a new all-time high, extending its lead in the stablecoin market even as crypto prices struggled after October’s forced liquidations.
According to Tether’s latest quarterly disclosure, USDt’s circulating supply rose to $187.3 billion, an increase of $12.4 billion over the quarter. The expansion came during a period when risk appetite weakened across digital assets, highlighting stablecoins’ role as a defensive on-ramp and liquidity layer.
Stablecoin gap widens after October sell-off
Market data shows USDt gaining ground while competitors failed to grow. Following the Oct. 10 liquidation event, Circle’s USD Coin (USDC) finished the quarter roughly flat, while Ethena’s USDe saw its market value fall by more than half.
The divergence underscores USDt’s entrenched position as the primary settlement asset across centralized exchanges and onchain markets, particularly during periods of volatility when traders reduce exposure to risk assets.
Onchain usage reaches new highs
Beyond supply growth, USDt activity on blockchains accelerated sharply. Tether reported an average of 24.8 million monthly active wallets in Q4, representing close to 70% of all stablecoin-holding addresses.
Quarterly transfer volume climbed to $4.4 trillion, while total onchain transactions reached 2.2 billion, reinforcing USDt’s role as the most widely used dollar proxy in crypto payments, trading, and remittances.
The distribution of holdings remained relatively stable. Roughly two-thirds of USDt supply sat in savings wallets and centralized exchanges, with the remaining third supporting payments, cross-border transfers, and decentralized finance use cases.
Reserves grow alongside Treasury exposure
Tether’s balance sheet continued to expand in parallel. Total reserves reached $192.9 billion at the end of Q4, up $11.7 billion from the previous quarter, resulting in $6.3 billion in net equity.
U.S. Treasury exposure increased to $141.6 billion, placing Tether among the world’s largest holders of short-dated U.S. government debt, ahead of several sovereign states. The company has repeatedly emphasized Treasuries as the core backing asset supporting USDt’s dollar peg.
Illicit activity remains a challenge
USDt’s dominance also means it features prominently in illicit blockchain activity. Data from Bitrace shows that $649 billion in stablecoins flowed through high-risk addresses in 2024, accounting for about 5.14% of total stablecoin transaction volume. Tron-based USDt represented more than 70% of that activity.
In response, Tether has expanded enforcement partnerships with TRM Labs and the Tron network to monitor transactions and freeze illicit funds when required.
U.S.-focused stablecoin debuts
In January, Tether also moved to address regulatory scrutiny in the United States by launching USAt, a dollar-pegged stablecoin designed specifically for the U.S. market. The token is issued by Anchorage Digital Bank, complies with the GENIUS Act framework, and debuted with a $10 million supply on Ethereum.
What to watch next
USDt’s continued growth during a market downturn suggests stablecoin demand remains closely tied to trading activity, payments, and dollar access rather than speculative cycles alone. Regulators’ response to Treasury-backed stablecoin issuers and the adoption of compliant U.S.-focused alternatives like USAt are likely to shape the next phase of competition in 2026.
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