Tether Holds $141B in U.S. Treasuries, Top Private Holder

Tether closed 2025 with total direct and indirect exposure to U.S. Treasuries above $141 billion, a company disclosure shows. That level places the stablecoin issuer as the 17th-largest holder of U.S. government debt and the largest non-sovereign holder worldwide.

By March 2025, 81.5% of Tether’s disclosed $149.3 billion in reserves were in cash, cash equivalents and short-term deposits. The company reported about $98.5 billion in direct Treasury bills and $15.1 billion in overnight repurchase agreements as part of those holdings.

Each USDT token represents a customer dollar that the issuer must hold in liquid assets. As Tether issues more tokens, it collects more cash and has invested a large share of those funds in short-dated Treasuries and related instruments, increasing private demand for U.S. government paper.

Federal legislation enacted in 2025 set new reserve rules for stablecoin issuers. The GENIUS Act, signed into law on July 18, 2025, requires 100% reserve backing with liquid assets such as U.S. dollars or short-term Treasuries and mandates monthly disclosure of reserve composition. Treasury Secretary Scott Bessent described the reserve requirement as a “debt relief engine” on the day of the Senate vote. The CLARITY Act, passed by the House and awaiting Senate action, would further integrate stablecoin rules into market structure.

The International Monetary Fund’s July 2025 External Sector Report noted that Tether and Circle together hold more U.S. Treasuries than some sovereigns and warned that large stablecoins could present risks to traditional lending, monetary policy and global liquidity. The IMF compared large stablecoins to money market funds and cautioned they could face confidence-driven runs in stress scenarios.

A U.S. Treasury analysis released in April 2025 estimated stablecoins could drain as much as $6.6 trillion of deposits from the banking system over time. Private forecasts differ: Standard Chartered estimated roughly $500 billion in U.S. bank deposit outflows by the end of 2028, while Citi researchers outlined scenarios with up to $1 trillion of domestic deposit outflows by 2030. Federal Reserve research said large, technologically advanced firms could offer tokenized deposits and custodial services to offset some disintermediation, while smaller banks could experience deposit erosion and higher funding costs.

The GENIUS Act bars stablecoin issuers from paying yield directly to token holders. Current rulemaking is focused on whether third-party platforms or wallets can provide rewards funded by reserve yields, a question that will affect stablecoin competitiveness relative to traditional deposit accounts.

Regulators have highlighted potential stress dynamics: a sudden spike in redemptions could force an issuer to sell Treasury positions into a market under pressure, widening losses and liquidity strains. Tether, a private company registered in El Salvador, shifted its reserves toward cash and short-term government securities after years of scrutiny over reserve quality and now holds a prominent position in U.S. sovereign debt markets.