How Do Stablecoin Issuers Make Money?

Stablecoin issuers are who manage and create stablecoins. If someone who has stablecoins gives the issuer $100, the issuer creates 100 stablecoins for the customer. The reserve also includes cash, bank deposits, or other eligible assets.

Stablecoin issuers can make money through interest on reserves, institutional fees, lending interest, crypto yield, and partnerships and integrations.

We will discuss each of them in detail below.

How Do Stablecoin Issuers Make Money?

Reserve Yield

Reserve yield is the type of income a stablecoin issuer earns from the money or eligible assets received from customers, which are used to support stablecoins in circulation. 

For example, the customer gives $1000 to the issuer, and the issuer makes 1000 USDC for that customer. The $1000 becomes part of the issuer’s reserve. The issuers cannot earn simply by holding the stablecoin. The reserve behind it generates the income. 

Depending on the issuer’s reserve structure, the reserves can be held in assets such as cash, bank deposits, or short-term US Treasury securities. 

Imagine the company has $1 billion worth of stablecoins in circulation, they invest those in assets such as US Treasury securities that generate interest. If the interest is like 4%, they can potentially earn $40 million in annual interest.

Issuers also need to make sure that their reserves remain safe and liquid because users may want to redeem their stablecoins.

Minting & Redemption Fees

Minting and redemption are another way for stablecoin issuers to earn money.

Minting is the process of creating new stablecoins when customers give the issuer money. For example, if the customer gives $1000 to the issuer, then they create 1000 new stablecoins for the customer. While the issuer makes a new stablecoin, they charge a small minting fee. That way, the issuer makes a small profit while creating a new stablecoin for the customer.

Redemption is the opposite of minting. If the customer wants their money back, they return the stablecoins to the issuer, and the issuer removes those tokens from circulation. This is called redemption, and the issuer charges a small fee when customers get their money back. 

Instead of charging a separate fee, the issuer earns from the spread. For example, if the customer gives $1.001 to the issuer to make new stablecoins, the customer receives $0.999 when redeeming. The $0.002 difference is the spread earned by the issuer. 

Institutional Service Fees

A stablecoin issuer can also earn through providing services to large businesses, banks, and financial institutions that use stablecoins. If a company holds a large amount of stablecoins and needs help managing them, the stablecoin issuer provides treasury management services for a fee. 

Treasury management is the process of helping a company manage its money and deciding how funds are moved or used. The issuer may also provide custody services by holding digital assets of institutional customers. 

Issuers can charge a fee for providing these services. These are called institutional service fees.
 

Lending Revenue

Lending interest is another way for stablecoin issuers to earn money. The issuer can earn by lending some of its assets to borrowers. For example, if the issuer has $100 million in assets with a reserve structure and applicable regulations, the issuer lends a portion of those assets to borrowers. The borrowers receive the funds and agree to pay interest on those assets. In this way, the stablecoin issuers earn money through lending.

Tether (USDT) vs Circle (USDC): Revenue Comparison

Tether and Circle are stablecoin companies. Tether is the company behind USDT, one of the world’s largest stablecoins. Circle is the company behind USDC.

Tether is older, larger by supply, and has looser disclosure. Circle is smaller by float but holds more regulatory licenses and publishes more granular reserve data. 

Tether is the market dominator, USDT has a much larger share of the overall stablecoin market than a competing stablecoin such as USDC. This dominance is due to its widespread use and liquidity. USDT is used extensively for buying and selling crypto and storing dollar-denominated value.

Circle is the issuer of the second-largest major stablecoin. It is also designed to maintain a value closer to $1. Circle positions USDC as a regulated digital dollar used for payments, trading, transfers, and other financial applications.

These are two of the largest stablecoin issuers in the world. We will compare Tether's and Circle’s revenue.

Tether’s [USDT] Revenue:

• Tether earns a significant portion of its revenue from the assets it holds as reserves to support USDT.
• Tether maintains assets to back the stablecoins.
• Instead of simply holding the assets, Tether earns significant income from its reserves. It is the core part of its business model.
• The major reserve strategy of Tether involves U.S. Treasury securities, especially short-term Treasury bills. By holding these securities, they generate income.
• Tether also holds Bitcoin and gold as part of its broader investment activities. This means Tether can generate income when the value of these assets increases.
• Tether can also generate income by providing funds to borrowers who provide assets as collateral. 
• Tether follows a diversified revenue strategy, generating income from multiple sources rather than depending on a single source of income. That is why it is a dominant player in the global market.

Circle’s [USDC] Revenue:

• Circle also earns income from its reserve. Circle issues USDC and maintains a reserve to support the stablecoins in circulation. 
• These reserves are primarily held in highly liquid assets that can generate interest or other income.
• Circle is heavily focused on cash, cash equivalent assets, and short-term U.S. government securities.
• Circle does not have major bitcoin and gold investment strategies.
• Circle is less dependent on Bitcoin or gold because the values of these assets may go up or down.

Conclusion

Overall, Tether and Circle use similar income-generating methods, except that Tether has broader investment exposure to assets such as Bitcoin and gold, as well as investments in AI infrastructure and communication technologies. In stablecoins, we can't just assume that the high-income-generating company is safe and has a better business model. Tether’s broader investment strategy can generate higher income while also exposing it to a wider range of assets. Both have their own pros and cons when it comes to generating income from their investment strategies.

How Fourchain Can Help You in Launching Your Stablecoin?

Fourchain has a blockchain expert team with an in-depth understanding and industry experience. We make sure to build your stablecoin with a compliance-driven solution, ensuring KYC/AML requirements, multi-chain-compatible stablecoin development that can be used in various blockchain networks, robust stablecoin architecture with an advanced stability mechanism, and tamper-proof smart contract architecture that accurately maintains the price of the stablecoin.

Collaborate with us to build a scalable infrastructure.

FAQ

Are stablecoins profitable?

Yes, stablecoins are profitable for their issuers. The stablecoin issuers earn mainly by generating interest from the reserve yield generated by the assets backing the stablecoins in circulation. Another way is through fees, spreads, and other institutional services.

Which stablecoin issuer makes the most money?

As per a survey, Tether is the world’s largest stablecoin issuer. They earn more than any other stablecoin issuer. They have made a profit of around $10 billion in 2025. The reason behind their success is their broader investment strategies.

Do stablecoin holders get interest?

No, if you hold simple stablecoins like USDT or USDC in your wallet, you won't get any profit or interest, and the issuer earns interest from the reserves backing the stablecoins.

What do I need to become a stablecoin issuer?

If you want to become a stablecoin issuer, first you have to get regulatory approval. Then a legal company and sufficient reserves backing your stablecoins. Your stablecoins must be built with KYC/AML, security, auditing, and transparency systems.