Tether, the company behind the world’s largest stablecoin, is quietly becoming one of the most important buyers of US government debt. With over $122 billion in direct Treasury bill holdings and a total exposure exceeding $141 billion when indirect positions are included, the firm has already outpaced several sovereign nations in its appetite for American paper.
From stablecoin issuer to Treasury heavyweight
Every USDT token in circulation needs to be backed by reserves, and Tether has chosen to park the vast majority of those reserves, roughly 83%, in US Treasury bills. As USDT’s market cap has ballooned to approximately $185 billion, the company has been forced to hoover up T-bills at a pace that would make most central banks raise an eyebrow.
In 2024, Tether made net Treasury purchases of $33.1 billion. That was enough to rank it seventh among all foreign buyers of US debt. In 2025, the figure came in at $28.2 billion, again landing in seventh place globally.
Tether has described itself as the fifth-largest purchaser of US Treasuries when hedge fund activity is excluded from the rankings. The company’s CEO has stated expectations that Tether will climb into the top 10 purchasers of T-bills in 2026, driven by continued USDT growth and new product lines.
What’s fueling the growth
Tether reports adding approximately 30 million new users per quarter, bringing its total user base to around 530 million. Each new user who acquires USDT effectively triggers demand for more reserve assets, and Tether’s reserve policy channels that demand straight into the Treasury market.
This flywheel generated over $10 billion in profits for Tether in 2025, almost entirely from the yield on its Treasury portfolio.
US Treasury Secretary Scott Bessent has publicly discussed the potential for stablecoin issuers to become a structural source of demand for T-bills, projecting that the sector could eventually absorb between $800 billion and $1 trillion in Treasuries as it scales.
Why Washington isn’t complaining
Stablecoin legislation moving through Congress would formalize reserve requirements that effectively mandate Treasury holdings, creating a regulatory framework that locks in this demand. Tether’s 83% allocation to Treasury bills is a far cry from the opaque mix of commercial paper and other instruments that drew scrutiny in earlier years.
The risks that come with scale
If USDT ever experienced a rapid redemption event, Tether would need to liquidate tens of billions in T-bills in a compressed timeframe. Treasury bills are among the most liquid instruments on earth, but selling $50 billion or more in a panic scenario could still create ripples in short-term funding markets.
Competitors like Circle, which issues USDC, also hold substantial Treasury reserves but at a smaller scale. As stablecoin legislation takes shape, the reserve requirements embedded in new laws could push the entire sector deeper into Treasuries, potentially validating Bessent’s $800 billion to $1 trillion projection.