Tether Holds the 22nd Largest US Treasury Bond Holdings Globally
Despite its significant holdings of US Treasury bonds as part of the USDT reserve, Tether is considered the 22nd largest "whale" of this asset class globally.
Tether Holds the 22nd Largest US Treasury Bond Holdings
According to a post by Chief Technology Officer Paolo Ardoino, Tether currently holds $72.5 billion in US Treasury bills (T-Bills), placing it among the top 22 entities worldwide with the largest ownership of US government debt, surpassing governments such as the United Arab Emirates, Mexico, Australia, and Spain.
While @Tether_to reached 72.5B exposure in US t-bills, being top 22 buyer globally, above United Arab Emirates, Mexico, Australia, Spain, ...$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 actual amount of T-Bills was reported in the company's Q2 2023 financials, which also marked USDT's reserve surplus being raised to $3.3 billion.
Meanwhile, the second-largest stablecoin issuer in the market, Circle, holds $8.389 billion in assets backed by US Treasury bonds, as of the end of July 2023.
Paolo Ardoino's post also commented on reports of the Chinese government reducing its holdings of US Treasury bonds and potentially shifting focus to gold. The CTO affirmed that Tether has the resources to provide "economic lifeblood" to nations grappling with inflation due to fiat currency instability.
However, while holding a large amount of US Treasury bonds may be a safe solution, it's not without its challenges. With only $90 million in cash reserves, Tether has faced delays in processing redemption requests during crisis periods, such as the recent USDT de-pegging incident following an attack on Curve Finance last month.
Delays may stem from Tether having to hold Treasury bonds through intermediary banks and adhere to procedural standards, such as banks not operating over weekends – a prime time for attacks on USDT.
The USDT de-pegging issue has yet to fully recover even after a month. It's worth noting that this isn't the first time USDT has de-pegged in 2023. In June, the largest stablecoin in the cryptocurrency market also de-pegged to $0.9959 USD due to negative information surrounding confidential documents released by the New York State government regarding the 2021 Tether lawsuit.
Despite intermittent instability, Tether remains the largest stablecoin by market capitalization, dominating over 60% of the stablecoin market. USDT's trading volume exceeded $50 billion in the past 24 hours, six times higher than that of USDC.
As the global economic landscape evolves and the cryptocurrency market continues to grow, Tether's presence in US Treasury bonds and its dominance in the stablecoin sector paint a picture of the increasing role of cryptocurrencies in global finance.
