Tether Holds Over $70 Billion In US Treasuries

USDT, the largest and most popular stablecoin, is backed by $72.5 billion in US Treasuries, making issuing company Tether one of the largest global holders. Almost 88% of USDT's $83 billion market cap is make up of such bonds, which are highly convertible and "cash like", but pay regular interest, unlike simply keeping dollars in a bank account.

While @Tether_to reached 72.5B exposure in US t-bills, being top 22 buyer globally, above United Arab Emirates, Mexico, Australia, Spain, ...$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… https://t.co/7hC12Nhzdq
— Paolo Ardoino 🍐 (@paoloardoino) September 5, 2023

The huge amount of T-Bills makes Tether the 22nd largest holder in the world, ahead of many countries.

A Major Source Of Demand

US Treasuries have been aggressively sold in recent months. China, in particular, has cut its holdings by a third in the last decade, and has accelerated the process over the last two years. Instead, they are increasingly favoring gold. In the first six months of 2023, China is believed to have bought 353 tonnes of gold, worth almost $22 billion at current prices, bringing the country's total to over 5,000 tonnes ($308 billion).

As the US issues more bonds, with fewer willing buyers, prices fall and yields rise—adding to interest payments on the national debt. Since willing buyers help push up the price of bonds, as Tether adoption continues to grow this creates an interesting dynamic whereby going after Tether could cause meaningful problems to the US government and economy. Bitcoin OG Samson Mow posted:

Currently, Tether holds more US Treasuries than countries like Australia and Mexico, and is drawing close to wealthy nations like Saudi Arabia (which also recently sold some billions of dollars worth of Treasuries).

A full breakdown of Tether's reserves can be found at tether.to/en/transparency/#reports. In addition to US Treasuries, the company also holds secured loans, precious metals, and bitcoin.

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