Who Gets the Interest on the Treasuries Backing a Stablecoin?

If you hold $1,000 of a conventional dollar stablecoin backed partly by Treasury bills, those Treasuries may be earning interest every day. But in most cases, the $1,000 stablecoin holder does not receive that yield.

Instead, the investment income generally accrues within the reserve structure and ultimately becomes revenue for the stablecoin issuer, subject to expenses, reserve arrangements and commercial agreements.

Take USDC. Circle says USDC reserves are held for the benefit of token holders and can include short-dated U.S. Treasuries, overnight Treasury repo and cash through the Circle Reserve Fund, which is managed by BlackRock and custodied by BNY.

The crucial distinction is that owning USDC gives a holder a token designed to be redeemable around $1. It does not normally give that holder direct ownership of the Treasury securities or a contractual right to the interest those securities generate.

The Stablecoin Stays at $1 While the Reserves Earn Money

Imagine an issuer has $10 billion of stablecoins outstanding and backs them with $10 billion of qualifying assets.

If much of that reserve portfolio earns an average 4% annual return, the simplified gross interest could approach:

$10 billion × 4% = $400 million a year

The token does not gradually become worth $1.04. Its job is to stay around $1.

That difference is the basis of an unusually powerful business model. As our guide to stablecoin reserves explains, issuers can hold enormous portfolios of low-risk, liquid assets while users continue to hold dollar-like tokens.

At sufficient scale, tiny changes in interest rates become meaningful. Our look at Treasury yields and stablecoins shows why a one-percentage-point change in reserve yields can move annual revenue by hundreds of millions or billions for the largest issuers.

Participant What they receive Stablecoin holder A token designed to remain near $1 Treasury Borrowed money and eventual repayment obligation Reserve portfolio Interest generated by Treasury bills and similar assets Issuer Reserve income after applicable costs and arrangements Custodians/managers Contracted fees where applicable Circle and Tether Show How Valuable the Interest Can Become

Circle provides one of the clearest examples because its financial statements disclose reserve income. Coinpaper found that reserve income represented more than 95% of Circle's revenue in Q2 2026, illustrating how central interest-bearing reserves can become to a stablecoin business.

Tether follows the same basic economic logic at an even larger scale. Its latest results show USDT issuance around $184.6 billion at the end of Q2 2026, with reserves concentrated heavily in short-duration liquid assets and the company reporting $1.5 billion in quarterly net operating profit.

Our guide to how Tether makes money covers reserve income alongside its other businesses.

Why Not Give the Interest to Stablecoin Holders?

Because a conventional payment stablecoin and an investment product serve different purposes.

A standard stablecoin promises stable redemption value and payment utility. A money-market fund, tokenized Treasury fund or yield-bearing token is specifically designed to pass investment returns to investors.

Some newer products deliberately distribute Treasury yield, but that changes their economics and potentially their regulatory treatment.

That is the key mechanism: the reserves can earn more without the stablecoin itself becoming worth more. For the largest issuers, the difference between those two numbers has become one of the most profitable businesses in digital finance.