Analysis: Washington values Tether's $114 billion Treasury holdings

The author argues that Washington values Tether's global dollar network and its Treasury purchases. Tether reported that USDT represented more than 60% of the stablecoin market at the end of June. Tether's reserve report listed $114.96 billion in directly held US Treasury bills. Bloomberg reported on Sept. 23 that the Trump administration was considering an overseas stablecoin initiative. The proposal could involve Treasury, the State Department, and the US International Development Finance Corporation. The initiative could seek to extend dollar use and support demand for US Treasuries. The report did not establish a deal with Tether. The initiative had not been announced as an operating program. In October 2021, the CFTC ordered Tether to pay $41 million over misleading representations about USDT's backing. In October 2022, Tether said it had eliminated commercial paper and replaced those investments with US Treasury bills. Tether reported $187.75 billion in total reserve assets and $183.64 billion in liabilities on June 30. The reserve report showed $4.11 billion above liabilities. Tether reported about $1.50 billion in second-quarter net operating profit. The report also listed $18.84 billion in precious metals. It listed $5.80 billion in Bitcoin. It listed $13.45 billion in secured loans. Tether's reserve portfolio therefore was not entirely composed of Treasury bills. New Treasury purchases occur when demand leads to net new USDT issuance. Buying existing USDT from another holder does not automatically send new money to Tether. Federal Reserve Governor Stephen Miran distinguished transfers of existing dollar holdings from new demand among foreign savers with restricted access to dollars. Treasury Secretary Scott Bessent linked stablecoins with wider access to the dollar economy and increased demand for US Treasuries in a July 2025 statement on the GENIUS Act. Tether adopted a voluntary freezing policy tied to US sanctions designations in December 2023. The Justice Department said on Sept. 9 that it had restrained $52 million in alleged scam proceeds and thanked Tether for assistance. The GENIUS Act includes registration and compliance conditions for foreign stablecoin issuers. Treasury's Aug. 17 proposed rule describes Jan. 18, 2027, as the expected effective date of the act. Tether announced USA₮ in January as a separate product issued by Anchorage Digital Bank. The announcement said USA₮ was neither government-guaranteed nor covered by federal deposit insurance. The article argues that Washington wants Tether's reach but also wants oversight and enforcement power.