Peeking Under the USDT Hood: Tether Releases Partial Audit Amid Growing Scrutiny

The cryptocurrency market has virtually no regulatory oversight or transparency. Those are features, not bugs, of the system.

However, as institutional interest in blockchain grows, and the regulatory stance in the United States softens, crypto firms now find themselves caught in a new position of needing to prove that their legitimacy can stand muster to enterprise expectations around security and trust.

Perhaps no firm is under the microscope more than Tether, the issuer of the USDT stablecoin, whose tokens represent 70% of the market. Stablecoins are increasingly coming to be seen not merely as instruments for crypto-native traders, but as viable building blocks in a digitized financial system.

Tether’s reserve composition has come under scrutiny in the past, and the company has chosen to exit certain regulated markets, but the changing U.S. cryptocurrency landscape could soon bring Tether’s stablecoin to America. Currently, Tether’s dominance is especially pronounced on offshore exchanges, emerging markets and decentralized finance protocols, where fiat banking access is constrained or unreliable.

Against this backdrop, on Thursday (May 1), Tether released its independently audited financial figures and reserves report as of March 31, showing top-line figures of $149.28 billion in total assets against $143.68 billion in liabilities for fiat-backed stablecoin holdings.

“Q1 2025 showcases Tether’s continued leadership in stability, strength and vision,” Tether CEO Paolo Ardoino said in a statement. “With record U.S. Treasury exposure, growing reserves, strong profits and increased adoption of USDT worldwide, we remain focused on delivering trust, transparency and value to hundreds of millions of users. Our mission is clear: to responsibly and compliantly power the digital economy and strengthen the role of the U.S. dollar on the global stage.”

Still, the report invites as many questions as it answers, particularly as the firm navigates legal disputes, regulatory transitions and the changing landscape of digital finance.

Read also: Keeping Stablecoins Stable is Complicated: Why CFOs Need to Pay Attention

Tether’s accounting firm, BDO, issued an assurance confirming that more than 90% of Tether’s reserves are held in cash and cash equivalents, with U.S. Treasuries alone making up over 75%. The report also included, for the first time, a detailed breakdown of secured lending, precious metals, bitcoin holdings, and investments in AI infrastructure, all of which remain minor but growing components of the company’s reserve profile.

The reserves backing USDT, which is pegged 1:1 to the U.S. dollar, were composed primarily of U.S. Treasuries, reverse repos, money market funds and cash equivalents — highly liquid, short-dated instruments that are widely perceived as low risk.

Bitcoin makes a substantial appearance in Tether’s reserves, valued at over $7.66 billion using a BTC price of $82,704. The inclusion of gold, $6.66 billion in LBMA-standard physical gold bars, adds another layer of non-correlated asset exposure, while $4.46 billion falls under “Other Investments,” a less transparent category. Corporate bonds and secured loans round out the rest, with the latter totaling $8.83 billion.

Still, questions remain about Tether’s corporate structure, regulatory domicile and governance practices. While it has improved disclosure, it has yet to undergo a full audit — something critics and regulators continue to demand.

Still, the latest report represents a shift from Dec. 31, when the company and its former sister entity, Tether Limited (Hong Kong), jointly reported $143.71 billion in assets and $136.62 billion in liabilities.

The separation of the entities and Tether International’s relocation from the British Virgin Islands to El Salvador in January marks more than a legal transition; it reflects a strategic reorientation under El Salvador’s Digital Asset Issuance Law.

BDO’s reasonable assurance engagement affirms that, in all material respects, the financial figures and reserves report is fairly presented in line with management’s stated accounting policies. The audit included reconciliations between internal ledgers, blockchain balances and third-party bank statements, as well as sampling of precious metals and validation of secured loan documentation.

However, the report also underscores several limitations. First, it captures only a single moment in time, March 31, and offers no assurance on activities before or after.

Tether did not respond to PYMNTS’ request for comment as of Friday morning (May 2).

See also: The Stablecoin Market Is $220 Billion. Are Businesses Actually Using Them?

As stablecoins become more integral to global money flows, the conversation is shifting from whether they will survive to how they will integrate with — or disrupt — traditional financial plumbing.

In a landmark move, Visa and Bridge — a stablecoin orchestration platform owned by Stripe — partnered Wednesday (April 30) to launch stablecoin-linked cards across key markets in Latin America. The product allows cardholders to use their stablecoin balance to make purchases at any merchant that accepts Visa.

Rain, a global card-issuing platform built for stablecoins, announced Thursday that it joined Visa’s pilot program for stablecoin settlement.

Meanwhile, Mastercard said Monday (April 28) that it partnered with two more companies — OKX and Nuvei — to further its own efforts to power stablecoin transactions for consumers and merchants.

The broader crypto landscape is also being reshaped by political developments, and ultimately, the creation of a federal framework governing stablecoins is important for industry confidence, Chainalysis co-founder and CEO Jonathan Levin told PYMNTS in April.

“Without a federal framework, it is incredibly difficult for financial services firms and international enterprises to really get comfortable in using stablecoins at scale,” Levin said.

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