Tether, the issuing company of the popular USDT stablecoin, has recorded a substantial increase in its reserves so far in 2024, through investment in United States Treasury bonds. Tether CEO Paolo Ardoino said the company had a stronger relationship with the US government than any other stablecoin issuer. This, to the point of becoming your «best friend.» The signature has about $98 billion in Treasury billswhich makes it one of the largest holders of these instruments worldwide, as Ardoino pointed out this week during an interview with Tom Farley, CEO of the Bullish exchange. In his conversation with Farley, Ardoino explained that the company owns more Treasury securities than many countries. «If Tether were a country, it would have investments equivalent to those of Germany – whose holdings are estimated at almost 96 billion – and would be approaching South Korea» (which exceeds USD 100 billion), observed the CEO of Tether. Hence I rate this position of the company as very satisfactorybecause «we are happy to decentralize ownership of US debt, which will make the United States much more resilient.»
Resilience for the US dollar
Ardoino drew attention to how Tether's investments in these bonds, they add resilience to US dollar ownership. «So now there is no single country, no single decision maker that can sell hundreds of billions of Treasury bills at a time.» He referred to the current trend towards global de-dollarization, a process driven by China and Russia that has led the Central Bank of China, the second largest holder of US government debt, to reduce its holdings. As reported by BitcoinDynamic, last May the Asian giant proceeded to sell a record amount of US debt in dollars, as a way to diversify your assets. This is a trend that occurs at the same time as the increase in Treasury bond holdings by Tether, which began investing in the bonds from 2022, as a way to achieve more liquidity. In that sense, Ardoino insists that «USDT and Tether are the best friends of the US dollar.»
A crossover between cryptocurrencies and geopolitics
For the executive, Tether's bond holdings are an example of the intersection between cryptocurrencies and geopolitics. This, as the debt provides backing to the stablecoin, which can be easily converted into dollars if USDT holders want to withdraw them. Meanwhile, interest payments accumulate in Tether coffers. Tether's latest certification reports 84% backed by cash and equivalents in other short-term USDT deposits corresponds to Treasury bondswhich generated profits in the order of USD 5.2 billion during the first half of 2024. Ardoino highlighted the role that USDT now plays in global economic dynamics, recalling the changes that have occurred since its creation, when the company was harshly questioned by the authorities and there were many doubts about its reserves. Now Tether is approaching its tenth birthday, says Ardoino. «Things have changed, it is now the dominant stablecoin in the world and the relationship with the government is simpler.» At this point, he cited compliance and accession efforts to local regulatory standards, as one of the reasons for its “very good link” with the US. In fact, “Tether is the only stablecoin that has incorporated the Federal Bureau of Investigation (FBI) and the Secret Service of the United States,» he concluded.