Tether challenges the top 10 buyers of U.S. debt! Holdings of 122 billion have surpassed Germany

Tether USA₮ CEO Bo Hines stated at the New York Bitcoin Investors Conference that driven by the growing demand for USDT and the newly launched USAT, Tether is expected to become one of the top ten buyers of U.S. Treasuries this year. The circulating value of USDT is approximately $185 billion, with 83.11% of reserves in U.S. Treasuries valued at over $122 billion, surpassing Germany to rank among the top foreign holders.

$122 Billion U.S. Treasury Holdings: Tether Surpasses Germany in Scale

USDT is the largest stablecoin by market cap, with a circulating token value of about $185 billion. According to its latest statement, 83.11% of USDT reserves are in U.S. Treasuries, worth over $122 billion. Hines said this positions Tether among the top 20 holders of U.S. government debt, “including all sovereign nations.” In the U.S. Treasury Department’s foreign holder rankings, the company ranks between Germany and Saudi Arabia.

What does a $122 billion treasury holding mean globally? According to U.S. Treasury data at the end of 2025, Germany holds about $110 billion in U.S. Treasuries, and Saudi Arabia holds about $135 billion. Tether’s $122 billion places it between these two major economies, surpassing Germany, a country with a population of 84 million and the world’s fourth-largest economy.

This surpassing is highly significant. Tether is a private company, not a sovereign nation or central bank, yet it holds such a large position in U.S. debt. This indicates that stablecoin issuers have become major players in the global financial system, with influence comparable to mid-sized countries. From the U.S. government’s perspective, Tether is an important buyer supporting the Treasury market, helping the U.S. finance its debt at lower costs.

From a business model perspective, Tether’s treasury purchases are a natural consequence of its stablecoin operations. For every $1 of USDT issued, Tether must hold equivalent dollar assets as reserves. Allocating these reserves into U.S. Treasuries not only meets regulatory requirements (as Treasuries are considered the safest assets) but also generates stable interest income. Currently, short-term U.S. Treasury yields are about 4%, so the $122 billion in holdings could generate approximately $4.88 billion annually in interest.

As USDT circulation continues to grow, Tether’s treasury holdings will inevitably increase. Hines pointed out that since USDT’s launch in 2014, it now has about 530 million users. “We add roughly 30 million new users each quarter, which is astonishing,” he added. This quarterly growth rate of 30 million users is rare in fintech, indicating explosive demand for stablecoins.

USAT Launch: A Compliant Stablecoin in Line with the GENIUS Act

Tether’s demand for U.S. Treasuries may also surge with the launch of USAT. USAT is issued by Anchorage Bank and aims to comply with the U.S. federal stablecoin framework, the GENIUS Act. The law requires regulated stablecoins to be backed 1:1 by high-quality assets, such as short-term U.S. Treasuries. This means USAT’s reserves will be fully allocated in U.S. Treasuries, unlike USDT, which may include some commercial paper or other assets.

It is reported that Hines served as the executive director of the White House Cryptocurrency Committee during Donald Trump’s presidency and played a key role in passing the GENIUS Act. Shortly after the law was signed into effect, he resigned in August and joined Tether as head of its U.S. subsidiary. Such “revolving door” personnel movements are common in Washington, where regulators become industry executives, leveraging their policy experience.

“Obviously, as we gradually meet the GENIUS compliance standards, we are increasing the amount of Treasury bills in our reserves,” Hines said, noting that there will be “reciprocity” between USDT and USAT stablecoins. “At the end of the day, they are both Tether.” This dual-currency strategy is very clever: USDT targets the global market with relatively lax regulation, while USAT targets U.S. institutions with full compliance. They can be exchanged for each other, providing users with flexibility.

Strategically, launching USAT is Tether’s proactive response to regulatory pressure. For a long time, Tether has faced questions over reserve transparency and compliance. Releasing a fully U.S. legal compliant USAT not only addresses these concerns but also opens the U.S. institutional market for Tether. Many U.S. banks and corporations, constrained by compliance, cannot use USDT but can adopt USAT compliant with the GENIUS Act.

Core Differences Between USDT and USAT

Regulatory Status: USDT is offshore with ambiguous regulation; USAT is issued by U.S. banks and fully compliant.

Reserve Requirements: USDT has 83.11% in Treasuries; USAT may require 100% in short-term U.S. Treasuries.

Target Market: USDT targets global retail and exchanges; USAT targets U.S. institutional clients.

As USAT expands, if it reaches $10 billion in one year (a conservative estimate), it would require an additional $10 billion in U.S. Treasuries. This would bring Tether’s total treasury holdings to $132 billion, further solidifying its position among the top ten buyers. If USAT hits $50 billion (an optimistic scenario), Tether’s treasury holdings could exceed $170 billion, potentially surpassing the UK (~$160 billion) to rank in the top five.

$6.3 Billion Excess Reserves and 140 Tons of Gold: Tether’s Financial Fortress

It is noteworthy that, according to accounting firm BDO, Tether holds about $6.3 billion in excess reserves. Excess reserves are assets beyond what is needed to maintain the 1:1 peg. With $185 billion USDT in circulation, Tether theoretically only needs to hold $185 billion in assets, but it actually holds about $191.3 billion, exceeding by $6.3 billion.

This excess reserve is a key indicator of Tether’s financial health, providing a buffer against sudden redemptions or asset value fluctuations. During the 2022 Terra/Luna collapse, which triggered a trust crisis in stablecoins, USDT briefly de-pegged to $0.95. Tether quickly regained confidence thanks to its ample reserves, demonstrating the value of excess reserves.

Hines also noted that Tether is the “13th largest gold holder in the world,” with about 140 tons of gold reserves. At current prices of $5,000 per ounce, this gold is worth roughly $2.24 billion (140 tons = 4,480,000 ounces). This scale surpasses many small countries’ central bank gold reserves, placing Tether ahead of some sovereign nations.

The gold reserves reflect Tether’s diversified asset management strategy. While most reserves are in U.S. Treasuries, gold adds extra security and inflation hedge properties. In extreme scenarios (such as a U.S. government debt crisis), gold reserves could serve as a final store of value. This diversification reduces risks associated with concentration in a single asset class.

Overall, Tether’s assets—$122 billion in Treasuries, $6.3 billion in excess reserves, $2.24 billion in gold, and other assets—form a very solid financial fortress. The scale and quality of these assets make Tether a formidable force in the global financial system. Every major decision, such as increasing or decreasing treasury holdings, could influence the U.S. debt market.

From the U.S. government’s perspective, Tether’s role as a major buyer is crucial. As traditional large buyers like China and Japan reduce their holdings, emerging buyers like Tether fill the gap. This diversified buyer base reduces reliance on any single country, enhancing the stability of the U.S. debt market.