Tether Emerges as Major U.S. Treasury Holder as Stablecoin Demand Explodes

Tether could soon become one of the top 10 buyers of U.S. Treasury bills, according to Bo Hines, CEO of Tether’s U.S. arm. The shift is being driven by explosive demand for USDT, the world’s largest stablecoin, and the launch of USAT, its new U.S.-compliant counterpart. Speaking at Bitcoin Investor Week, Hines signaled that as stablecoin issuance grows, so too will Tether’s appetite for short-term government debt.

USDT now has roughly $185 billion in circulation and serves an estimated 530 million users, adding about 30 million new users each quarter. To back this supply, Tether holds more than $122 billion in U.S. Treasury bills, accounting for over 83% of its reserves. At current levels, that places Tether among the top 20 global holders of U.S. government debt, between major sovereign nations like Germany and Saudi Arabia.

When Stablecoins Became a Profit Engine

The turning point for Tether’s influence came as interest rates surged globally. With higher Treasury yields, stablecoin reserves became significantly more profitable. According to The Kobeissi Letter, Tether reported $10 billion in profit in just the first nine months of 2025, supported by $137 billion in Treasury holdings, ranking it as the 17th-largest holder of U.S. debt at the time.

The model is simple but powerful: users mint USDT and receive a dollar-pegged digital token that pays no interest. Tether invests the underlying reserves into short-term Treasurys and captures the yield spread. In effect, stablecoin users provide zero-cost capital, while Tether earns interest on highly liquid government securities.

What Makes Tether the Top Choice?

Tether’s dominance stems from liquidity, global accessibility, and trust in redemption stability. USDT remains deeply integrated across exchanges, DeFi platforms, and emerging markets, making it the primary on-chain dollar substitute. The introduction of USAT, issued through Anchorage Bank and structured under the U.S. GENIUS Act, further strengthens its regulatory positioning. USAT is designed to meet strict 1:1 high-quality asset backing requirements, signaling alignment with U.S. compliance standards.

This dual-token approach, global USDT and compliant USAT, reinforces Tether’s reach across both offshore and regulated markets.

Crypto and Market Impact

Tether’s growing Treasury footprint links crypto liquidity directly to U.S. debt markets. As stablecoin supply expands, so does demand for Treasurys, effectively turning crypto adoption into a driver of sovereign debt buying.

However, rising scrutiny is emerging around whether stablecoin issuers should share yield with users. Competitors like Jupiter’s $JUPUSD aim to redistribute Treasury returns on-chain. If that model gains traction, it could reshape the stablecoin landscape and challenge Tether’s high-margin dominance.