Tether has quietly built a position in U.S. Treasury bills that now exceeds the combined holdings of Germany, Spain, and Australia, making it roughly the nineteenth-largest holder of U.S. debt in the world. By parking over one hundred twenty billion dollars in short-term Treasuries, the company bolsters the safety of its dollar-pegged token, USDT, and reduces its reliance on purely cryptocurrency reserves. At the same time, Tether’s market capitalization has swelled to about one hundred fifty-two billion dollars, giving it more than sixty percent of the global stablecoin market, and its reported operating profits of thirteen billion dollars in 2024 were driven largely by yield on those Treasury holdings as well as strategic investments in Bitcoin and gold.
Meanwhile, a recent cloture vote in the U.S. Senate on the GENIUS Act has cleared the way for banks and other regulated institutions to issue payment stablecoins backed one-for-one with liquid reserves such as U.S. dollars and U.S. Treasuries. Under the new rules, issuers with more than ten billion dollars in market cap will fall under federal oversight, face anti-money-laundering requirements, and must disclose their reserve composition every month. Encouraged by this clear regulatory framework, major banks are now making preparations to launch their own stablecoins in hopes of competing with the crypto-native players.
In the first quarter of 2025, Tether expanded its USDT supply by about seven billion dollars while its closest competitor, USDC, saw net outflows of nearly eight hundred million dollars amid regulatory pressure. On centralized exchanges USDT remains the liquidity leader even as USDC trading volumes grow through partnerships with regulated platforms. Tether’s massive Treasury holdings underscore a broader shift in which stablecoins are evolving from niche digital tokens into significant actors in global capital markets. As banks enter the space under the GENIUS Act, competition will center on transparency, reserve management, and compliance. This new diversity of issuers could strengthen the overall ecosystem and help bring digital dollars into mainstream payments, trading, and corporate treasury functions, signaling a maturation of the entire digital-asset landscape.
