Tether’s $114.96B Treasury Holdings Draw Washington’s Attention

Tether reported holding $114.96 billion in US Treasury bills, turning the issuer of the world’s largest stablecoin into a major buyer of American government debt. Bloomberg reported on Sept. 23 that the Trump administration was considering an overseas stablecoin initiative involving possible private-sector joint ventures. The proposal has not been announced as an operating program, and the report does not establish a deal with Tether.

Why it matters

Tether’s appeal to Washington is about more than its Treasury portfolio. USDT represented more than 60% of the stablecoin market at the end of June, according to the company, and gives people a way to hold and transfer dollar-denominated balances without opening a US bank account. That distribution network could help extend dollar use to people with limited access to conventional finance, aligning with the administration’s stated goal of supporting both dollar reach and demand for Treasuries.

The relationship has changed sharply. In 2021, the CFTC ordered Tether to pay $41 million over misleading representations about USDT’s backing. Tether later eliminated commercial paper from its reserves and shifted toward Treasury bills. Its June 30 reserve report listed $187.75 billion in assets against $183.64 billion in liabilities, a $4.11 billion excess. The portfolio also included $18.63 billion in overnight reverse repos, $18.84 billion in precious metals, $5.80 billion in Bitcoin and $13.45 billion in secured loans, so the reserves are not simply a Treasury-bill portfolio.

Market impact

Tether reported about $1.50 billion in second-quarter net operating profit, led by Treasury and repo income. USDT holders do not receive a contractual share of that return. New reserve assets depend on net new issuance: buying an existing token from another holder transfers it but does not automatically create a new Treasury purchase. Payments volume and fresh financing for the US government are therefore different measures.

Washington’s interest also comes with potential conditions. The GENIUS Act sets requirements for foreign stablecoin issuers seeking access to US markets, including registration and compliance with lawful orders. Tether’s ability to freeze tokens at specified addresses, including under its voluntary policy tied to US sanctions designations, illustrates the issuer’s control over a centrally issued token. The reported initiative remains only a proposal, but the larger question is how far US policymakers will encourage stablecoin distribution while attaching oversight and access conditions.