Tether's stated ambition to rank among the top five global buyers of US Treasuries, backed by $122 billion in direct T-bill reserves, deepens the link between stablecoin markets and sovereign debt while concentrating redemption risk.
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Tether targets top-5 Treasury buyer status with $122 billion in T-bills
The stablecoin issuer behind USDT is climbing the ranks of sovereign-scale buyers of American debt, with $122 billion in direct Treasury bill holdings already placing it seventh among foreign purchasers of US government paper.
"Stablecoin issuers could become a structural source of demand for T-bills, potentially absorbing between $800 billion and $1 trillion in Treasuries as the sector scales," US Treasury Secretary Scott Bessent has said.
Tether made net Treasury purchases of $33.1 billion in 2024 and $28.2 billion in 2025, each ranking seventh among all foreign buyers of US debt, according to company disclosures. Roughly 83 percent of its reserves sit in Treasury bills, backing a USDT market cap near $185 billion. The company added about 30 million users per quarter, reaching roughly 530 million total, and generated more than $10 billion in profit in 2025, almost entirely from the yield on its Treasury portfolio.
The concentration cuts both ways. If USDT faced rapid redemptions, Tether would need to liquidate tens of billions in T-bills in a compressed window — Treasury bills are among the most liquid instruments on earth, but a forced sale of $50 billion or more could still ripple through short-term funding markets. The GENIUS Act, enacted in July 2025 with a general effective date expected Jan. 18, 2027, formalizes reserve requirements that effectively mandate Treasury holdings, locking in this demand channel.
The systemic risk embedded in stablecoin reserves
Federal Reserve staff estimated total stablecoin market capitalization at $317 billion on April 6, 2026, more than 50 percent above its level in early 2025. A Treasury Borrowing Advisory Committee analysis found that bills represented 53 percent of Tether and Circle assets, with their combined bill holdings up $70 billion since 2022. Even after that growth, stablecoin issuers hold less than 1 percent of Treasuries outstanding — their demand affects the bill market at the margin.
The Fed analysis flagged a gap between the two largest issuers. USDC held high-quality reserves equal to its stablecoin liabilities, while USDT reported total reserves at about 1.04 times liabilities but higher-quality reserves at roughly 0.74 times liabilities. Fed staff warned that complex intermediation and deeper links to traditional finance can increase opacity and spread operational or liquidity failures as adoption grows.
Circle president Heath Tarbert told Congress on Sept. 2 that placing digital-dollar infrastructure under US rules could reinforce the network effects supporting the currency's global role. The Bank for International Settlements estimates roughly 98 percent of stablecoin value is denominated in dollars, and researchers warn that a run on a major issuer could transmit stress into local financial systems and short-term dollar markets.
Tether's CEO has said the company expects to climb into the top 10 purchasers of T-bills in 2026, driven by continued USDT growth and new product lines. The company describes itself as the fifth-largest purchaser of US Treasuries when hedge fund activity is excluded from rankings. As stablecoin legislation takes shape, reserve requirements embedded in new laws could push the entire sector deeper into Treasuries, potentially confirming Bessent's projection.
This article is for informational purposes only and does not constitute investment advice.
