Tether’s cushion to cover unexpected shocks has shrunk dramatically despite the stablecoin’s supply increasing. Between Q1 and Q2 2026, USDT’s excess reserves plunged from $8.23 billion down to $4.11 billion, even though the circulating supply grew by about $446 million during the same period. This change signals a tightening margin of safety for holders.

As of June 30, Tether reported total assets of $187.75 billion against liabilities of $183.64 billion, leaving that $4.11 billion surplus as the main buffer against losses. But the details within that buffer paint a more complex picture. The company’s gold holdings increased by weight to 146.2 metric tons from 132.2, yet the dollar value of gold dropped to $18.84 billion from $19.84 billion due to a roughly 15% decline in gold’s price, now around $4,000 per ounce. Bitcoin holdings also rose in quantity to 98,933 BTC, up by nearly 1,800 coins, but their dollar value fell to $5.8 billion from $6.62 billion as Bitcoin’s price slid from $68,200 to $58,600.

Transparency Dims as Disclosure Standards Evolve

The latest attestation from BDO Italia reflects a retreat in clarity rather than an improvement. The report stopped showing the dollar value of gold, which is now reported only by its weight, and removed the Bitcoin valuation completely. also critical details about the maturity and makeup of Tether’s Treasury bill holdings remain undisclosed. This change contrasts sharply with competitors like Circle, which offers monthly audits from Deloitte with detailed CUSIP-level information and weekly reserve updates.

New Regulations Reshape Tether’s Reserve Strategy

These opacity moves coincide with the stricter requirements of the GENIUS Act. The law mandates stablecoin reserves must primarily consist of cash, short-dated Treasury bills (maturities of 93 days or less), repurchase agreements, money market funds, or Federal Reserve balances. Assets like gold and Bitcoin, which make up a significant slice of Tether’s reserves, are not compliant. This means Tether’s core USDT product currently fails to meet the act’s standards. While the company is trying to innovate with products like USAT through Anchorage Digital to cater to certain market demands, the fundamental regulatory challenge remains unresolved.

Tether’s recent profit surge contrasts with these risk factors, highlighting the balancing act it faces between growth and compliance.

This article is for informational purposes and does not constitute financial advice.