Tether has just released its attestation report for the first quarter of 2025, which describes a significant increase in holdings of U.S. Treasury bonds. The company acquired over $65 billion in these assets from January 1 to the end of the quarter.
The Tether report also repeatedly mentioned a potential role in global flows of U.S. dollars, referring to USDT as 'the leading digital representation' of this currency. The company's Treasury assets now account for over 80% of its total assets.
Why is Tether buying U.S. Treasury bonds?
When Tether, the world's largest issuer of stablecoins, released its attestation report for the fourth quarter of 2024, it reported $33 billion in U.S. Treasury bonds.
Since then, an entire quarter has passed, and the company's new report details a significant pattern of acquisitions. As of March 31, it held $98.5 billion in Treasury bonds, with an additional $21.3 billion in indirect influence.
The company's report also claims that the total amount of its assets is $149.2 billion. In other words, over 80% of Tether's assets are directly and indirectly held in U.S. Treasury bonds.
In comparison, it holds only $7 billion in Bitcoin, which the company has consistently acquired in the past.
Rumors suggested that the company would downplay Bitcoin to better align with stablecoin regulations in the U.S., and this event may be occurring. If the proposed legislation becomes law, the U.S. will require Tether to hold the majority of its reserve assets in Treasury bonds. With these acquisitions, this requirement has been met.
Tether is repositioning its business in several key areas to facilitate compliance with U.S. regulations. At the end of March, President Trump suggested that stablecoins could support the dollar's dominance, and Tether seems interested in this goal.
The report repeatedly mentioned concepts such as 'the growing role of Tether in dollar-denominated liquidity distribution' and 'supporting the global significance of the U.S. dollar in a rapidly changing economy.'
The company described USDT as 'the leading digital representation of the U.S. dollar,' and its CEO Paolo Ardoino supported these sentiments:
"Our mission is clear: to responsibly and in accordance with regulations provide for the digital economy and strengthen the role of the U.S. dollar on the global stage," he said.
If Tether seeks to take on this transformative role, its significant holdings of U.S. Treasury bonds will greatly assist in this endeavor. Its assets are significantly larger than those of most governments, to the extent that it can influence the global Treasury bond market.
Overall, these acquisitions are likely to contribute to significant business initiatives for Tether in the U.S. market in the near future.
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