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Tether Opts for US Treasury Bills to Back Stablecoin USDT

2 mins
Updated by Geraint Price
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In Brief

  • Tether now holds $72.5 billion in US Treasury bills, making it one of the top 22 global buyers, surpassing countries like Spain.
  • The company’s influence grows, especially in emerging markets, as USDT provides a stable financial instrument amid rampant inflation.
  • While Tether amasses US Treasury holdings, China is selling off its own, focusing instead on gold investments.
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Tether, the issuer of the most widely-used stablecoin, USDT, has positioned itself as a powerhouse. According to Paolo Ardoino, CTO of Tether, the company has accumulated a staggering $72.5 billion in US Treasury bills, catapulting it among the top 22 global buyers. 

While Tether solidifies its portfolio, China, once a significant holder of US Treasury bills, is divesting at an accelerated pace, funneling its investments into gold. 

Tether Treasury Holdings Grow as China Sells Off

Experts had long speculated that China wouldn’t jettison its US Treasury holdings due to potential ramifications on its own economy. Nonetheless, the data speaks for itself. China’s sell-off rate is gaining momentum.

Click here to learn about the best crypto wallets to store Tether.

“China’s ownership of US Treasury debt is down almost $481 billion from peak levels. The rate of selling is accelerating,” said Ivan Bayoukhi, founder of Wall Street Silver. 

China's US Treasury holdings are at their lowest level in 14 years, while the Tether (USDT) stablecoin is growing.
China’s US Treasury holdings are at their lowest level in 14 years. | Source: X (Twitter)

This changing environment augments Tether’s role, especially in emerging markets, as a valuable financial resource. Ardoino describes USDT as a “lifeline” for communities dealing with hyperinflation, offering them a stable financial instrument to preserve their wealth.

“USDT is the most used stablecoin in the world, with a huge focus on emerging markets. For many of these communities USDT is a lifeline to protect themselves and their families from the insane inflation of their national currencies,” said Ardoino.

Despite facing a 1.2% dip in market capitalization last month, Tether retains its market dominance. Its market cap still stands at an impressive $82.9 billion, far ahead of its closest rival, USD Coin (USDC). 

What exactly is a stablecoin? Click here for a beginner’s guide.

Meanwhile, Tether’s treasury reserve has increased by $850 million in the last quarter, hitting a total of $3.3 billion, further enhancing its liquidity and stability.

“Tether reached $72.5 billion exposure in US t-bills, being top 22 buyer globally, above the United Arab Emirates, Mexico, Australia and Spain,” added Ardoino.

With the stablecoin market undergoing rapid evolution, Tether’s climb in US Treasury holdings sets it apart from competitors. Binance’s BUSD faces the heat from regulatory scrutiny, and USDC has seen its market share halved over the past year. 

Yet, Tether’s market share remains undeterred, holding over 60% of the stablecoin market.

“By continuously improving our reserves attestation process, we aim to set new standards in the industry and inspire others to follow suit,” concluded Ardoino. 

During recent downturns that decimated nearly $100 billion off the crypto market, Tether’s USDT briefly deviated from its $1 peg. However, its trading volume quickly bounced back, exceeding $50 billion in a 24-hour window, outpacing USDC six-fold.

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