Tether International completed its first full financial statement audit on August 13, 2026. KPMG U.S. issued an unqualified opinion on the company's 2025 financial statements, confirming reserves exceeded liabilities by $6.814 billion. The audit examined assets, liabilities, income, cash flows, i...
"It was a heavy-lifting exercise." — Paolo Ardoino, CEO, Tether
Tether International completed its first full financial statement audit on August 13, 2026. KPMG U.S. issued an unqualified opinion on the company's 2025 financial statements, confirming reserves exceeded liabilities by $6.814 billion. The audit examined assets, liabilities, income, cash flows, internal systems, counterparties, and supporting documentation — including a physical count of every gold bar in Tether's custody.
The milestone arrives as Tether simultaneously faces regulatory exclusion from two of its three largest addressable markets. In the EU, the MiCA transition period ended July 1, 2026, triggering USDT delistings across every MiCA-licensed exchange. In the U.S., the GENIUS Act imposes a July 2028 compliance deadline that Tether has not yet met. Revolut, one of Europe's largest fintechs, set an August 31, 2026 cutoff for all remaining USDT balances in the EEA and Switzerland.
The result is a paradox: Tether has never been more financially transparent, yet its addressable market on regulated platforms is shrinking. USDT's $187 billion market cap and 59% stablecoin market share remain intact globally, but its position is eroding in jurisdictions where regulated on-ramps matter most.
KPMG U.S. audited Tether International S.A. de C.V.'s financial statements for the fiscal year ending December 31, 2025. The firm issued an unqualified opinion — the strongest conclusion an independent auditor can reach, carrying no reservations, exceptions, or caveats.
The audit scope extended beyond previous quarterly attestations performed by BDO. KPMG examined:
According to Tether's announcement, total reserves exceeded total liabilities by $6.814 billion at year-end 2025. The company described it as "the largest inaugural financial audit in history," a reference to the scale of assets under examination.
Prior to this audit, Tether had relied exclusively on quarterly attestation reports — a narrower form of assurance that verifies reserve balances at a single point in time without examining the full financial statement package. The shift to a full audit under U.S. GAAP represents a material upgrade in transparency standards.
Ardoino stated in Tether's press release: "For years, some detractors said an audit of Tether could not be completed. We have once again proven them wrong." In subsequent media interviews with The Block, he added: "Honestly, I don't care," when asked about continued skepticism from critics.
Tether reported more than $10 billion in net profit for full-year 2025, according to CoinDesk. Bloomberg reported the figure represented a 23% decline from 2024, though the absolute number remained larger than the annual profits of most publicly traded financial institutions.
2025 Quarterly Breakdown:
The company ended 2025 with $6.3 billion in excess reserves backing $186.5 billion in USDT liabilities.
2026 Results (through Q2):
Tether's Q1 2026 attestation, prepared by BDO, reported $1.04 billion in net profit and an $8.23 billion equity buffer. Q2 2026 showed improvement in operating profit — $1.5 billion — but a sharp decline in the reserve buffer.
Excess reserves fell from $8.23 billion at end-Q1 to $4.11 billion at end-Q2, a roughly 50% decline in one quarter. USDT issuance stood at approximately $184.6 billion at June 30, up $446 million from Q1. Returns from the U.S. Treasury portfolio continued to drive earnings, though declines in Bitcoin and gold valuations weighed on the overall buffer.
Gold holdings expanded to more than 146 metric tons as of Q2 2026, a 9.5% quarter-over-quarter increase, according to Tether's own reporting.
Tether's U.S. Treasury exposure reached $141 billion by Q1 2026, comprising $122 billion in direct holdings and an additional amount in overnight reverse repurchase agreements. This makes the company the 17th largest holder of U.S. government debt globally, according to CryptoSlate's analysis of Treasury data.
For context: Tether holds more U.S. Treasuries than South Korea, Germany, or the UAE individually. The IMF's July 2025 External Sector Report noted that Tether and Circle collectively hold more U.S. Treasuries than Saudi Arabia.
Beyond Treasuries, the audited 2025 financial statements showed Tether held $17 billion in gold and approximately $8 billion in Bitcoin. The company's reserve composition — heavily weighted toward short-duration U.S. government securities — aligns with the requirements of both MiCA (which Tether chose not to comply with) and the GENIUS Act (which it must comply with by 2028).
The concentration of stablecoin reserves in U.S. government debt has drawn attention from policymakers. Analysts at CryptoSlate have noted that Tether's $141 billion Treasury position introduces a systemic link between stablecoin redemption risk and U.S. sovereign debt markets — a dynamic that did not exist five years ago.
The EU's Markets in Crypto-Assets regulation completed its transition period for stablecoin issuers on July 1, 2026. Since that date, no MiCA-licensed exchange in the European Economic Area offers USDT trading pairs. The delistings affect retail customers across 30 EEA member states.
Tether's Position: The company chose not to apply for e-money token authorization in the EU. Ardoino has publicly objected to MiCA's requirement that 60% of stablecoin reserves be held in EU bank deposits, arguing this creates concentration risk in the European banking system.
Platforms that delisted USDT for EEA retail users: Binance, Coinbase, Kraken, Crypto.com, and — effective August 31, 2026 — Revolut.
Revolut Timeline: Starting July 6, USDT purchases were suspended. Deposits were blocked after July 30. Customers can sell or withdraw to external wallets until August 31. Any remaining USDT balances after that date will be automatically converted to fiat at prevailing exchange rates.
Volume Impact: USDT trading volumes on EU-regulated venues fell over 70% between Q4 2024 and Q2 2025, according to Bitget's exchange data analysis. USDC volumes on the same venues nearly doubled over the same period. Order-book depth for USDT/EUR pairs collapsed; USDC/EUR depth on Coinbase, Kraken, and Bitstamp expanded materially.
User Migration: According to Coinpaprika data cited by Bitget, USDT trading volume from European users has shifted visibly toward decentralized exchanges since the July 1 deadline. Holding USDT in self-custody wallets remains legal throughout the EU — the restriction applies only to regulated platform listings.
Circle, which obtained an Electronic Money Institution license in France in July 2024, has positioned USDC and EURC as the primary MiCA-compliant alternatives. Every major venue that delisted USDT retained USDC listings for EEA customers.
President Trump signed the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act into law in July 2025. The legislation imposes a three-year transition period: by July 2028, digital asset service providers are prohibited from offering non-compliant stablecoins on U.S. centralized exchanges.
Key Requirements:
The Critical Gap: As of August 2026, the Treasury Department has not issued a reciprocity determination for Tether's home jurisdiction. Without this determination, Tether cannot legally offer USDT to U.S. businesses once the transition period ends. The OCC has begun writing implementing rules independently, according to crypto.news, even as the GENIUS Act's own regulatory timeline has experienced delays.
Tether's reserve composition — dominated by U.S. Treasuries and cash equivalents — appears broadly consistent with GENIUS Act requirements on paper. The structural obstacles are jurisdictional and procedural, not compositional.
If Tether fails to obtain compliance by July 2028, USDT would face restrictions on U.S. centralized exchanges — a scenario that would compound the EU losses and potentially push USDT further toward offshore and decentralized venues.
The stablecoin market reached $308 billion as of mid-August 2026, according to Reap Global's stablecoin data tracker, up 14.3% year-over-year from $269.4 billion.
Global Market Share (August 2026):
Volume Dynamics: USDT commands approximately 74% of on-chain trading volume despite holding 59% of supply, reflecting its dominance in crypto-native trading. However, USDC leads in annual settlement volume — $18.3 trillion vs. USDT's $13.3 trillion in 2025 — driven by institutional and payments use cases.
The market is bifurcating along geographic and regulatory lines. USDC dominates the regulated Western corridor: EU-compliant exchanges, U.S. institutional platforms, and cross-border settlement rails. USDT retains dominance in emerging markets — Venezuela, Argentina, Bolivia, Turkey — where it functions as a de facto dollar savings instrument, according to statements from Ardoino on August 23, 2026.
New entrants are filling specialized niches rather than challenging the duopoly directly. Ethena's USDe, PayPal's PYUSD, and Ripple's RLUSD each serve distinct use cases. Analysts increasingly characterize the stablecoin market as segmented by function and jurisdiction rather than competing for a single unified user base.
Tether's KPMG audit resolves a question that dogged the company for a decade: whether an independent auditor could verify the reserves behind the world's largest stablecoin. The answer is yes, and the numbers held up. A $6.8 billion surplus, $141 billion in Treasuries, and physical gold verification leave little room for the reserve adequacy arguments that defined earlier criticism.
The questions that remain are jurisdictional, not financial. The EU has already closed the regulated door. The U.S. door stays open until July 2028, but the path to compliance requires a reciprocity determination that does not yet exist. If both markets restrict regulated access, USDT's addressable market on compliant platforms narrows to Asia-Pacific, the Middle East, Latin America, and decentralized venues.
That may be sufficient. USDT's deepest adoption is in precisely the emerging markets where regulated platform access matters least and dollar-denominated savings matter most. The $187 billion in circulation is not going to zero. But the geographic center of gravity is shifting, and with it, the competitive dynamics between USDT and USDC.
The audit proved solvency. What it cannot prove is regulatory compatibility across fragmenting global jurisdictions.