KPMG U.S. issued an unqualified opinion on Tether International S.A. de C.V.'s 2025 financial statements on August 13, 2026, marking the first full financial audit of the $184 billion stablecoin issuer. The audit confirmed a $6.814 billion reserve surplus above liabilities as of December 31, 2025...
"This is a defining moment for the stablecoin industry." — Paolo Ardoino, CEO, Tether
KPMG U.S. issued an unqualified opinion on Tether International S.A. de C.V.'s 2025 financial statements on August 13, 2026, marking the first full financial audit of the $184 billion stablecoin issuer. The audit confirmed a $6.814 billion reserve surplus above liabilities as of December 31, 2025, and covered all four financial statements — balance sheet, income statement, changes in equity, and cash flows.
The milestone closes a transparency gap that persisted for nearly a decade. However, the audit arrives in a changed regulatory environment. The GENIUS Act, signed July 18, 2025, excludes gold and bitcoin from eligible stablecoin reserves. Tether holds an estimated 25% of its reserves in non-qualifying assets — approximately $17.4 billion in gold and $8.4 billion in bitcoin at year-end 2025. Simultaneously, Tether's own BDO Italia Q2 2026 attestation shows the reserve surplus fell 40% to $4.11 billion by June 30, 2026, driven by unrealized losses on those same non-qualifying holdings.
KPMG U.S. conducted a full GAAS (Generally Accepted Auditing Standards) financial statement audit of Tether International S.A. de C.V. for the fiscal year ended December 31, 2025. The result was an unqualified opinion — the highest-confidence outcome an independent auditor can issue, indicating that financial statements present fairly, in all material respects, the company's financial position.
The audit scope included independent substantive testing across transactions, systems, and counterparty documentation. Notably, KPMG physically inspected and counted individual gold bars held by Tether, verifying existence and identifying information rather than relying solely on custodian reports.
This marks a categorical upgrade from Tether's prior disclosure regime, which consisted of quarterly agreed-upon-procedures attestations from BDO Italia. Those attestations were point-in-time reserve confirmations — snapshots of a single day's holdings — rather than comprehensive audits of financial performance, internal controls, and asset flows across a full fiscal year.
According to Tether CFO Simon McWilliams, the audit represents "a landmark moment for Tether and for the industry we serve — a milestone in our commitment to transparency."
The audited statements and prior attestation reports reveal the following financial profile for fiscal year 2025:
| Metric | Figure | |--------|--------| | Net profit (FY 2025) | >$10 billion | | Reserve surplus over liabilities (Dec. 31, 2025) | $6.814 billion | | USDT in circulation (year-end 2025) | ~$186 billion | | Total assets backing USDT | ~$193 billion | | U.S. Treasury exposure (direct + repo) | $141 billion | | Direct U.S. Treasury holdings | $122 billion | | Gold holdings | $17.4 billion (~146 tonnes) | | Bitcoin holdings | $8.4 billion | | Q2 2026 net operating profit | $1.5 billion |
Tether's $141 billion in U.S. Treasury exposure at year-end 2025 places it among the largest holders of U.S. government debt globally, according to data compiled by Tether and reported by CoinDesk. The company's revenue model is straightforward: Tether earns yield on the reserve assets backing USDT while paying zero interest to USDT holders. At prevailing Treasury yields, this model generated over $10 billion in annual profit in 2025.
The audit validates the existence and fair presentation of Tether's reserves but cannot resolve the compliance question introduced by the GENIUS Act, which creates a federal framework for payment stablecoins in the United States.
Under Section 4 of the GENIUS Act, permissible reserve assets are limited to:
The Act explicitly excludes corporate debt, equities, and — critically for Tether — gold, bitcoin, and secured loans. According to analysis by CryptoSlate and reserve data published by Tether itself, approximately 25% of Tether's reserves sit in asset categories that do not qualify under the GENIUS Act framework.
The reserve composition as of Q4 2025 breaks down approximately as follows:
| Asset Category | Approximate Share | GENIUS-Eligible | |---------------|-------------------|-----------------| | U.S. Treasuries (direct + repo + MMFs) | ~75-80% | Yes | | Gold | ~9% | No | | Bitcoin | ~4-5% | No | | Secured loans | ~5% | No | | Other | ~1-5% | Varies |
Tether operates USDT through an issuer domiciled outside the United States (El Salvador). Under the GENIUS Act, foreign stablecoin issuers require a Treasury Department reciprocity determination to continue serving U.S. businesses. As of August 2026, that determination has not been issued, according to reporting by Incrypted.
The compliance deadline is July 18, 2028 — three years from the Act's signing. Tether has announced plans to register USDT under the Act's foreign issuer pathway, but the operational challenge of divesting $25+ billion in non-qualifying assets without disrupting markets or eroding the reserve buffer remains unaddressed publicly.
While the KPMG audit confirmed a $6.814 billion surplus at year-end 2025, subsequent quarterly data tells a different story.
Tether's BDO Italia attestation for Q1 2026 reported excess reserves of $8.23 billion — temporarily above the audited year-end figure, reflecting Q1 operating profit accumulation. By Q2 2026 (June 30), the surplus had collapsed to $4.11 billion, according to the BDO attestation released July 31, 2026.
That represents a 50% decline in reserve surplus within a single quarter. The drop occurred despite Tether recording $1.5 billion in Q2 operating profit from Treasury yields.
The explanation lies in unrealized losses. According to CoinDesk reporting, Tether's first-half 2026 comprehensive result — which includes mark-to-market changes on gold and bitcoin — came in near negative $3.17 billion. Falling gold and bitcoin prices in Q2 wiped out operating gains and more, compressing the surplus from $8.23 billion to $4.11 billion.
This dynamic illustrates the structural tension in Tether's reserve strategy: the non-GENIUS-eligible assets (gold and bitcoin) that regulators want removed are also the assets introducing volatility into the reserve buffer. Treasury-only reserves would produce lower total returns but a more stable surplus.
As of the July 31 attestation, Tether held $187.75 billion in assets against $183.64 billion in liabilities — a surplus-to-issuance ratio of approximately 2.2%, down from 3.7% at year-end 2025.
Tether launched USA₮ (USAT) on January 27, 2026, a separate U.S.-domiciled stablecoin designed for GENIUS Act compliance from inception.
Key structural differences between USDT and USAT:
| Feature | USDT | USAT | |---------|------|------| | Issuer domicile | El Salvador | United States | | Issuing entity | Tether International | Anchorage Digital Bank (federally chartered) | | Reserve custodian | Multiple (undisclosed) | Cantor Fitzgerald | | Reserve composition | Treasuries + gold + bitcoin + loans | U.S. Treasuries only | | Regulatory framework | Pending foreign issuer pathway | GENIUS Act-compliant | | CEO | Paolo Ardoino | Bo Hines (former White House crypto advisor) |
The appointment of Bo Hines — who departed a White House crypto advisory role in August 2025 — as USAT CEO signals a deliberate regulatory positioning strategy. Cantor Fitzgerald's involvement as reserve custodian and preferred primary dealer provides institutional-grade Treasury market access.
USAT effectively functions as Tether's insurance policy: if USDT cannot achieve or maintain GENIUS Act compliance, U.S.-facing business can migrate to USAT without leaving the Tether ecosystem.
Tether's USDT commands approximately 63.9% of the stablecoin market, with a capitalization of approximately $183-184 billion as of August 2026. USDC (Circle) holds second position at approximately 25% share. Together, USDT and USDC account for approximately 89% of total stablecoin market capitalization and roughly 97% of stablecoin trading volume, according to data compiled by Reap Global and Motley Fool.
The total stablecoin market capitalization stands at approximately $286-310 billion as of August 2026, depending on the data provider.
Circle, Tether's primary competitor, completed its own KPMG audit cycle earlier and has structured USDC reserves exclusively in cash and short-dated Treasuries — a composition already aligned with GENIUS Act requirements. Circle's Q2 2026 financials, reported separately, revealed a similar Treasury-yield dependency but without the gold/bitcoin volatility risk.
The competitive dynamic is clear: Circle has regulatory alignment but less market share. Tether has dominant market share but a regulatory gap. The two-year GENIUS Act compliance window will determine whether this gap closes or widens.
Tether's transparency trajectory has been marked by enforcement actions that make the KPMG milestone significant in context:
October 2021: The CFTC fined Tether $41 million for making "untrue or misleading statements" about reserves. According to the CFTC enforcement order, from June 2016 to February 2019, Tether misrepresented that it maintained sufficient fiat reserves to back every USDT token. In the June-September 2017 period, backing never exceeded $61.5 million despite approximately 442 million tokens in circulation.
February 2021: Tether settled with the New York Attorney General for $18.5 million over related misrepresentations by Tether and affiliated exchange Bitfinex.
2022-2025: Tether transitioned to quarterly BDO Italia attestations and progressively increased reserve transparency, publishing category-level breakdowns and shifting composition toward U.S. Treasuries.
August 13, 2026: KPMG U.S. unqualified opinion on 2025 financials.
The distance between a CFTC finding that reserves backed only 27.6% of outstanding tokens on some days and a Big Four clean audit opinion represents a material transformation in operational discipline — regardless of the regulatory questions that remain.
KPMG U.S. issued an unqualified opinion on Tether's 2025 financials, confirming a $6.814 billion reserve surplus and validating $141 billion in U.S. Treasury exposure. This is the first full financial audit in Tether's history.
Approximately 25% of Tether's reserves — gold ($17.4B), bitcoin ($8.4B), and secured loans — do not qualify under the GENIUS Act's eligible reserve asset framework. Tether has until July 2028 to comply.
The reserve surplus fell 40% from $6.814 billion (Dec. 2025) to $4.11 billion (June 2026), driven by unrealized losses on non-qualifying gold and bitcoin holdings — the same assets regulators want removed.
Tether launched USAT, a GENIUS Act-compliant U.S. stablecoin issued through Anchorage Digital Bank with Cantor Fitzgerald as custodian, hedging against potential USDT compliance failure.
The stablecoin market stands at $286-310 billion, with USDT commanding ~64% share. The regulatory compliance gap between USDT and USDC remains the primary competitive variable over the next two years.
The KPMG audit resolves Tether's oldest credibility problem — the absence of a full, independent financial audit — while simultaneously highlighting its newest one. The same audit that confirmed $6.8 billion in excess reserves also documented a reserve composition that is approximately 25% non-compliant with the regulatory framework now governing U.S. stablecoins.
Tether's revenue model — earning Treasury yields on $184 billion in float while paying holders nothing — generates extraordinary profit margins. Over $10 billion in 2025 profit from what is effectively a zero-cost funding base. But the model's stability depends on maintaining the reserve buffer, which is now under pressure from the very asset diversification strategy that helped build it.
The two-year window to July 2028 will determine whether Tether can restructure reserves, secure foreign issuer recognition, and maintain market share simultaneously. The USAT launch suggests Tether's management is not waiting for a single outcome. They are building parallel tracks — one for regulatory compliance, one for market continuity.
The audit is a credential. The compliance question remains open.