Tether’s controversial loans soar, Canada joins stablecoin parade

Tether’s controversial loans now outstrip its ‘equity,’ Mastercard wants to spend billions acquiring digital payment rails, and Canada is now officially on board the stablecoin bandwagon.

Tether has released its latest attestation of the reserves backing the $174.4 billion in Tether’s USDT stablecoin circulating as of September 30. That market cap is $17 billion higher than the total amount of USDT circulating as of June 30, and that figure has risen a further $9 billion as of October 4 to $183.3 billion.

Tether claims that its reserves totaled $181.2 billion at the end of Q3, giving it nearly $6.8 billion in surplus reserves, aka ‘equity.’ But that’s less than the $7.1 billion ‘equity’ that Tether boasted of as of December 31, 2024, and the company has distributed slightly more ($10.4 billion) in ‘dividends’ to its owners than the $10.1 billion in profits it claims to have earned in the first nine months of 2025.

Tether’s ownership is highly concentrated, as SEC filings from April show founder Giancarlo Devasini holds “a greater than 50% voting interest in Tether Holdings, S.A. de C.V.” Current Tether CEO Paolo Ardoino’s stake has been estimated at ~20%, while his predecessor Jean-Louis van der Velde’s share is reportedly in the 10-15% range.

It’s all the more curious that this handful of execs would appear so determined to transfer all the profits their company has made this year (and more) into their own pockets, while simultaneously seeking to raise up to $20 billion by selling 3% of the company to outside investors. Ardoino has claimed this isn’t about anyone’s need for quick cash, but is intended to ‘send a message’ about Tether’s determination to expand beyond its current confines.

Before we dig into the Q3’s nitty-gritty, a reminder that the figures Tether releases don’t represent a full independent audit, merely a one-day snapshot of Tether’s accounts as of September 30. As usual, BDO Italia, the offshoot of the global BDO professional services network that performs these attestations, makes no assertions regarding these facts and figures for any period other than that single day.

And one quick diversion: the media has begun asking why BDO USA’s audit of failed auto parts firm First Brands was unable to reveal the “substantial discrepancies between the financial information that BDO USA validated and the financial picture that is now coming into focus” following First Brands’ bankruptcy filing in September.

With those caveats in mind, let’s tuck in.

The loan arranger

Tether claims that the bulk of its reserves are held in U.S. Treasury bills, which totaled $112.4 billion as of September 30, up from $105.5 billion as of June 30. Add in the $18 billion in overnight reverse repurchase agreements and $6.4 billion in money market funds, and Tether’s ‘total T-bill exposure’ is ~$135 billion, up from $127 billion at the end of Q2.

Tether also boasts $3 billion in term reverse repos (nearly twice the Q2 figure), while its liquid cash fell by another $2.3 million to $30.1 million, and its “non-U.S.” T-bills dipped slightly to just under $48 million.

As for Tether’s less liquid assets, its ‘precious metals’ haul shot up nearly 50% to nearly $13 billion, while its BTC stack rose only 10% to $9.85 billion. Considering that the BTC token’s value rose by ~6.5% between June 30 and September 30, Tether’s willingness to buy ‘digital gold’ seems to pale in comparison to its faith in actual gold (the value of which rose 17% over the same span).

Recent rumors that Tether was dumping BTC for gold were dismissed by Ardoino, who tweeted on September 7 that Tether “didn’t sell any Bitcoin.” Instead, Ardoino said Tether had contributed part of its BTC stack to Twenty One Capital, the ‘digital asset treasury’ that launched this spring (and to which Tether supplied an additional 5,800 BTC tokens in August).

For the record, Tether also bought nearly 8,889 BTC worth over $1 billion from its sister exchange Bitfinex on September 30, the day the attestation snapshot was conducted. Read into that what you will.

Then there’s Tether’s highly controversial ‘secured loans’ category, which Tether pledged to purge from its balance sheet nearly three years ago. The sum of these outstanding loans reached $14.6 billion as of September 30, up from $10.1 billion at the end of June. So not only is this category not shrinking, it’s now the third-largest item on Tether’s asset chart.

Tether previously dismissed concerns regarding the size of these loans, saying there was no problem so long as their total didn’t exceed its ‘equity’ figure. That ship has now sailed, and the ‘cash & equivalents’ share of Tether’s assets continues to shrink, falling nearly three points from Q2 to just 77.2%.

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Western Union goes all-in

Western Union says USDPT (issued by Anchorage Digital) is “designed to bridge the digital and fiat worlds” by allowing customers to “send, receive, spend and hold USDPT through a seamless user experience supported by the company’s global compliance and risk capacities.” The company expects USDPT will arrive sometime in H1 2026, and partnerships will be struck with digital asset exchanges to ensure accessibility.

Western Union CEO Devin McGranahan said USDPT “will allow us to own the economics linked to stablecoins,” but the company’s crypto ambitions don’t stop there. McGranahan simultaneously announced plans for its Digital Asset Network, “a solution for the last mile of the crypto journey by partnering with wallets and wallet providers to provide customers with seamless access to cash off-ramps for digital assets by leveraging our global network.”

Western Union then filed a trademark application for WUUSD, with a variety of stablecoin functions stated as possibilities. It’s unclear whether this indicates plans for an additional dollar-backed token, but the filing states that the mark could also be applied to a crypto wallet, “cryptocurrency exchange services,” crypto lending, derivatives, and a wide range of other applications.

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Mastercard buying Zerohash? Coinbase buying BVNK?

On October 29, Fortune reported that Mastercard (NASDAQ: MA) was in “late-stage” talks to acquire Zerohash, the Chicago-based stablecoin/blockchain infrastructure firm. While there’s no guarantee a deal will be made, the report claimed Mastercard was prepared to pay between $1.5-$2 billion for Zerohash, which launched in 2017 and was recently valued at $1 billion following investments from the likes of Interactive Brokers (NASDAQ: IBKR), Morgan Stanley (NASDAQ: MS), Apollo (NASDAQ: APO), and SoFi.

Mastercard has been exploring the blockchain space for years and was recently mentioned as part of a bidding war with Coinbase (NASDAQ: COIN) digital asset exchange to acquire BVNK, a U.K.-based electronic money institution (EMI) that provides businesses with stablecoin-based payment infrastructure.

Coinbase Ventures participated in BVNK’s $50 million funding round last December, and Fortune reported in early October that Coinbase appeared to have “the inside track” over Mastercard in acquiring BVNK for a price that could top $2.5 billion. On October 31, Bloomberg reported that Coinbase was in “late-stage” talks regarding “a roughly $2 billion” deal for BVNK after Mastercard was sidelined.

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Canada stablecoin plans confirmed

Recent rumors about Canada including stablecoins in the governing Liberal Party’s federal budget came true on November 4. Language under the heading of ‘Supporting Innovation and Global Competitiveness’ states plainly “the government’s intention to introduce legislation to regulate the issuance of fiat-backed stablecoins in Canada.”

The budget says this legislation will require stablecoin issuers to “maintain and manage adequate asset reserves, establish redemption policies, implement risk management frameworks, and protect the sensitive and personal information of Canadians.” There will also be “national security safeguards to support the integrity of the framework so that fiat-backed stablecoins are safe and secure for consumers and businesses to use.”

Canada’s Retail Payment Activities Act will be amended “to enable the regulation of payment service providers that carry out payment functions using prescribed stablecoins.” The Bank of Canada will reserve C$10 million (US$7 million) over two years to help implement the scheme, with annual costs thereafter of ~C$5 million to be “offset from stablecoin issuers regulated under the Act.”

Lucas Matheson, country director of Coinbase’s Canadian offshoot, tweeted that Canada had “joined the global conversation on the future of money.” Matheson thanked all the government leaders who’d contributed to this development but cautioned that “the real work starts now.”

In September, Alberta-based crypto custodian Tetra Digital Group announced it had raised C$10 million for its plan to issue the first Canadian fiat-backed stablecoin by early 2026. Tetra’s as-yet unnamed stablecoin would initially focus on B2B transfers before addressing retail opportunities.

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Circle v ‘Murica redux

Finally, American firearm enthusiasts have lowered their guns after USDC issuer Circle (NASDAQ: CRCL) amended its terms of service to eliminate what some perceived as fightin’ words.

If you’ll recall, last month saw (metaphorical) shots fired when Americans for Tax Reform (ATR) ranted about Circle prohibiting the use of USDC for purchasing “weapons of any kind,” including guns & ammo. ATR’s missive was picked up by the National Shooting Sports Foundation (NSSF), which warned Circle about “ideological gatekeeping by crypto companies.”

On November 3, NSSF informed its members that Circle says it has “clarified our Terms to reflect that USDC may be used for the lawful purchase and sale of firearms, as protected under the Second Amendment. We have not and will not deny the use of USDC for legally permissible transactions involving firearms. Therefore, we have now made explicit in our Terms that which has always been implicit in their implementation.”

NSSF said Circle’s “willingness to revisit its policies so quickly is welcome,” but nonetheless warned that “Americans must remain vigilant against efforts to choke off lawful commerce under the guise of ‘risk management’ or ‘reputational risk.’ NSSF will continue to monitor Circle’s actions closely.”

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Watch: Regulation is on full throttle

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