Tether Becomes Top-10 U.S. Treasury Holder
Tether has become one of the top 10 holders of U.S. Treasuries, driven by explosive demand for its USDT stablecoin from both retail and institutional users. The company's accumulation of government debt is accelerating with the launch of its new U.S.-Treasury-backed stablecoin, USAT. This trend highlights a growing symbiosis between the stablecoin market and U.S. government debt.
- As of its latest attestation, Tether's direct and indirect exposure to U.S. Treasuries is approximately $135 billion, making it the 17th largest holder globally, ahead of countries like South Korea. - The profitability of this strategy is significant; Tether reported over $10 billion in net profit for 2025, driven by the yield from its massive Treasury holdings while USDT holders receive no interest. - U.S. Treasury bills comprise over 83% of the reserves backing the ~$185 billion circulating supply of USDT. The company also holds $6.3 billion in excess reserves, which are not backing tokens but provide a buffer. - The company is adding approximately 30 million new users per quarter, indicating sustained global demand for dollar-denominated digital assets. - Tether's reserve diversification includes significant holdings in Bitcoin and gold, with the company being the 13th-largest holder of gold in the world, owning about 140 tons. - The launch of the USAT stablecoin, issued through Anchorage Bank and designed for U.S. compliance under the GENIUS Act, signals a dual-token strategy to capture both global and regulated U.S. markets. - Competitors are emerging with models designed to share the yield from Treasury reserves with stablecoin holders, which could challenge Tether's high-margin business model if they gain traction. - Beyond reserves, Tether is making strategic equity investments in sectors like AI, renewable energy, and Bitcoin mining from its profits, with this portfolio exceeding $20 billion.
