Tether, the company behind the popular stablecoin USDT, has quietly become a major player in the US Treasury market. It now holds a staggering $120 billion in US government bonds, surpassing even Germany’s holdings of $111.4 billion. This makes Tether the 19th largest holder of US Treasuries globally.
Outpacing Nations
This is a significant development. A stablecoin issuer, a private company, now holds more US debt than many large countries. In 2024 alone, Tether was the seventh largest buyer of US Treasuries, outspending nations like Canada, Mexico, Taiwan, and Norway. This shows how crypto firms are increasingly using traditional assets like US Treasuries to back their digital currencies.
Profitable Strategy
Tether’s investment strategy is paying off. In the first quarter of 2025, the company reported over $1 billion in profit, largely thanks to its Treasury holdings and gold reserves. This demonstrates the potential for stable and liquid assets to generate significant returns, even during market volatility. However, this success relies on continued low borrowing costs and the absence of major bank runs.
USDT’s Explosive Growth
USDT’s market capitalization recently exceeded $150 billion for the first time, marking a significant increase of over $11 billion this year. The sheer volume of transactions is also impressive: over 250 million users completed 5.8 billion transactions totaling $33.6 trillion in the past year. Experts predict continued growth for stablecoins, with projections reaching $1.6 trillion to $2 trillion by 2030.
Expansion into New Markets
Tether is also expanding its reach. They recently listed Tether Gold (XAUₜ) on a Thai exchange, capitalizing on Thailand’s recent decision to allow trading of USD-backed stablecoins without restrictions. This move opens up new opportunities in Asia’s growing markets.
The Bigger Picture
Tether’s massive Treasury holdings highlight a broader trend: stablecoin issuers are becoming increasingly important players in the global bond market. While this provides stability to the often volatile cryptocurrency market, it also raises questions about the increasing influence of private entities in a traditionally government-dominated market.
