Overview
Tether, issuer of USDT, has managed to accumulate over 120 billion dollars in U.S. Treasury bonds, surpassing the 111.4 billion currently held by Germany.
Together, Tether and Circle (USDC) have already accumulated more than 150 billion dollars in those assets, a figure that exceeds the sum of the holdings of Germany, South Korea, and the United Arab Emirates.
More recently, all major stablecoin issuers — Tether, Circle, First Digital, Paxos — reached a combined total of approximately 182.4 billion dollars in Treasury bonds, placing them as the 17th largest global holder.
Why does this happen?
This phenomenon is due to the operation of stablecoins: each time a unit is issued, the associated reserves are typically invested in highly liquid assets such as T-bills (short-term bonds). This logic transforms the growth of stablecoins into automatic demand for U.S. Treasury.
Additionally, recent legislation in the U.S., known as the GENIUS Act, requires stablecoins to be backed by highly liquid assets such as these bonds, reinforcing the buying trend.
Notable implications
1. Role as non-sovereign buyers
Tether is now among the largest buyers of U.S. public debt, comparable to sovereign holders like Germany or South Korea.
2. Financial stability and institutional backing
Holdings in T-bills have allowed Tether to better withstand crypto volatility. Its traditional portfolio was key to generating over 1 billion USD in operational profits just in the first quarter of 2025.
3. Systemic risks?
Although the legislation provides transparency, there are concerns about stability. A massive withdrawal of funds or loss of confidence could force a rushed sale of these bonds, causing stress in the debt markets. Additionally, academic research suggests that Tether's influence could even reduce the yields on T-bills — an estimated savings of approximately 15 billion USD per year due to its impact.
4. Reinforcement of the dollar as the dominant currency
By transforming digital assets into tangible demand for U.S. debt, stablecoins help solidify the dollar as the global reserve currency.