Tether, the company behind USDT, announced that 2024, it was the seventh largest investor in U.S. securities, purchasing around $33 billion in treasury securities. This places Tether above countries such as Canada, Mexico, and Germany. The Cayman Islands topped the list with more than $100 billion in securities. Tether’s CEO noted that investors were widespread in the Cayman Islands or Luxembourg and did not represent a single entity. Tether invested in U.S. securities as part of its strategy to peg its USDT stablecoin to more stable assets. By investing in securities, Tether increases the security of its stablecoin because it meets liquidity standards and can back up its assets in the event of a financial collapse. Tether holds U.S. treasury holdings, which provide stablecoins with a means to expand their market dominance and reach a global market. The overlap between Tether and a treasury debt market further integrates the American system with cryptocurrencies. U.S. politicians may take a more serious look at stablecoins as a way to expand U.S. treasury dominance across the world. Tether holds around $94 billion in U.S. Treasuries accumulated over the years, including their large purchase in 2024, which is used to back up their stablecoin USDT. Treasury bonds are considered safe and liquid, an adequate choice for Tether so that their stablecoin can remain stable and fully backed. The global market has recently seen a surge in stablecoin demand, with the market capitalization of stablecoins reaching $219 billion. This suggests to some that the Bitcoin price is mid-cycle and hasn’t reached its peak yet. Others might argue that stablecoins are boosted when people are mass selling Bitcoin and other cryptocurrencies. The Genius Act, which is waiting for approval in Congress, would require stablecoin providers to back up tokens with U.S. treasuries. This would be good for Tether because they already comply with the proposed law. Tether has provided around 400 million people access to the U.S. dollar, particularly from poorer nations. USDT, therefore, is not only a means of exchange but also allows people to access the currency pegged to the world’s largest economy. However, dollarization is a key feature of inflated economies, such as Argentina, as a way to temporarily escape economic collapse, possibly suggesting a global crisis. In the event of further crises, people can buy stablecoins online, without the need for complicated paperwork, and maintain their wealth and business operations despite ongoing inflation.
