Tether has completed the first full annual financial statement audit in its history. KPMG U.S. issued the stablecoin issuer an unqualified opinion for the 2025 financial year and confirmed a reserve surplus of USD 6.814 billion.

Tether issues USDT, the largest stablecoin by market capitalization. Because the token is pegged to the US dollar, the reserves must cover every unit in circulation. In practice, USDT functions above all as trading and settlement liquidity on crypto exchanges and as dollar exposure in regions with limited access to the US banking system. The company first held out the prospect of a full audit back in 2017, but subsequently delivered only quarterly attestations. KPMG has now, for the first time, examined the complete annual accounts rather than the reserve holdings alone. USDT in circulation stood at around USD 186.5 billion at the end of 2025. The token currently ranks third among all cryptocurrencies, with a market capitalization of just under USD 183 billion.

What the audit covers

The opinion follows AICPA auditing standards, while the accounting rests on US GAAP. An unqualified opinion means the auditors raise no material qualifications about the figures. This distinguishes the report fundamentally from the earlier attestations, which confirmed holdings on a single reporting date under previously agreed procedures. A full financial statement audit, by contrast, also covers systems, valuations and internal controls.

KPMG's work covered the balance sheet, income statement, statement of changes in equity and cash flow statement, along with the underlying transactions and the counterparties. For institutional users, this shifts the evidence base: until now, every risk review rested on point-in-time confirmations without insight into the control systems.

Reserve composition

US Treasuries form the largest reserve block at around USD 141 billion, a record for the company. The company itself compares the position with sovereign holdings and places itself among the largest holders of US government debt worldwide. Roughly 130 tonnes of physical gold worth USD 17.4 billion sat in the reserves at the balance sheet date, up from USD 12.9 billion in the third quarter of 2025. For the precious metal, KPMG inspected each bar individually on site.

Bitcoin holdings came to around USD 8.4 billion as of the balance sheet date, after standing at around USD 9.9 billion at the end of September 2025. Secured loans added up to around USD 14.6 billion, likewise as of the end of September 2025. The reported surplus of USD 6.814 billion thus quantifies the assets that exceed the backing of all issued tokens.

The reserve mix shifted noticeably during 2025. Treasuries still dominated at around 78% of assets in mid-2025, while the company considerably expanded gold, Bitcoin and secured loans alongside them. Tether justifies this course with diversification and additional yield.

In the 2025 financial year, the issuer earned a profit of more than USD 10 billion, a decline of roughly 23% from around USD 13 billion in the prior year. Over the same period, USDT in circulation grew by around USD 50 billion. The contrast between rising circulation and falling earnings stands out.

From the failed Friedman audit to a Big Four opinion

In 2017, Tether hired the audit firm Friedman LLP for a full financial statement audit. In January 2018, however, the engagement ended without a result. After that, the issuer published quarterly attestations only, most recently through BDO Italia. Such reports under agreed-upon procedures confirm reserves as of one reporting date, while internal controls and the full set of accounts stay outside the mandate. Critics such as the pseudonymous blogger Bitfinexed therefore held the company to be unauditable for years. Executives later repeatedly held out the prospect of an opinion from one of the four large audit firms, putting the timeline at months rather than years.

2021 brought the regulatory reckoning. The CFTC imposed a fine of USD 41 million over misleading statements about the dollar backing of USDT; between 2016 and 2019, dollar reserves fully covered the token on only 27.6% of the days examined. At the same time, Tether settled with the New York Attorney General for USD 18.5 million. Two points were at issue: the missing 1:1 backing and a USD 850 million loan to sister exchange Bitfinex, which in turn covered losses from the earlier seizure of funds at the payment processor Crypto Capital.

Not least against this background, the opinion carries more weight than a formality. CEO Paolo Ardoino placed the result in context:

"Some may call this the end of a long journey, we see it as the beginning of the next." — Paolo Ardoino, CEO, Tether

The audited perimeter does not cover the entire Tether group

Firstly, the opinion applies to Tether International, S.A. de C.V. alone. This entity issues USDT but does not represent the whole group. The holding structure further includes Tether International Limited, Tether Operations Limited and the mining company Zettahash Limited, all three of which sit in the British Virgin Islands, along with Tether Limited in Hong Kong. Additional BVI entities run commodity and investment businesses. Tether nevertheless communicates the result as confirmation for the issuer as a whole, while the KPMG opinion does not report these companies separately. The company calls the audit itself the largest first-time audit in financial history.

Secondly, an open point concerns the figures themselves. The BDO attestation as of 31 December 2025, published at the end of January 2026, showed a surplus of USD 6.3 billion. The KPMG full audit, however, cites USD 6.814 billion for the same reporting date. Where the difference of around USD 500 million comes from remains unclear; possible explanations include diverging valuation methods, later adjustments or a different consolidation scope.

The full audit report is also not publicly available, so all known figures come from Tether's own summary of the results. The stated figure of more than 650 million users worldwide likewise lacks external confirmation and comes solely from the company announcement. In January 2025, the group moved its headquarters from the British Virgin Islands to El Salvador, after the country had granted it a license as a digital asset service provider. The parent company has since been Tether Holdings El Salvador S.A. de C.V.

Circle's listing raises the transparency pressure on Tether

The timing of the opinion falls into a phase of sharper competition. Rival Circle, issuer of the stablecoin USDC, listed on the NYSE in June 2025; the stock closed its first trading day 168% above the issue price of USD 31. The listing made the rival's reserve structure verifiable for shareholders and supervisors, and Grant Thornton attests Circle's holdings monthly. For years, the company has also positioned itself as the already independently audited alternative to Tether.

USDC nonetheless remains comparatively small. The token reached around USD 75 billion in market capitalization in 2025, against around USD 186.5 billion for USDT. In percentage terms, USDC nevertheless grew faster, at 73% versus 36% for USDT, but in absolute terms the market leader stays clearly ahead.

Meanwhile, the regulatory framework has tightened. With the signing of the GENIUS Act in July 2025, payment stablecoins gained their first US federal framework, with the obligations taking effect in stages. The law confines permissible reserves largely to high-quality liquid assets such as cash and short-dated US Treasuries and requires issuers to report reserve composition monthly. Tether finally responded in January 2026 with USAT, a separate, US-regulated stablecoin. The nationally chartered Anchorage Digital Bank, N.A. issues the token, and Cantor Fitzgerald holds the reserves in custody. Since then, the issuer has run two products in parallel: USDT for international markets and USAT for the US market. USAT carries its own reserves and thus falls outside the KPMG opinion.

In the European Union, the market consequences of missing authorization became apparent earlier: after the MiCA regulation took full effect at the end of 2024, several trading venues, including Coinbase, delisted or restricted USDT for European users in early 2025 because the token lacked the required authorization.

Ultimately, the opinion refers only to the reporting date of 31 December 2025. Beyond that date, it offers no guarantee. Whether the full report becomes publicly available, whether a full audit is repeated annually, and how USAT's reporting develops under the US rules remain open questions.