Tether is expected to be one of the 10 largest buyers of the U.S. Treasury bills this year, according to a former White House crypto adviser and the current head of Tether’s U.S. unit, Bo Hines. The company will also buy more Treasury bills as demand for its stablecoins, especially USDT and the new USAT, rises, he added.
Bo Hines made these remarks at Bitcoin Investor Week in New York City, noting that stablecoin companies are becoming more active in traditional financial markets, particularly in buying U.S. government debt.
Tether’s buying of Treasury bills is growing at a fast pace, he said. He continued, noting that they anticipate continued growth and becoming a global top-10 buyer of Treasury bills.
The firm already holds a large body of U.S. government debt. Its latest financial attestation reveals that roughly 83.11% of its reserves are in U.S. Treasury bills, totaling more than $122 billion.
Treasury bills are short-term government debt securities that many see as safe and reliable investments. And with these holdings, Tether is already among the top 20 holders of Treasury bills worldwide. The company’s position puts it not far behind countries such as Germany and Saudi Arabia in the league of foreign Treasury holders, Hines stated. Tether is a private company; as such, it is not a national government.
The reason for large holdings of this sort is straightforward. Stablecoins such as USDT are created to maintain a fixed value, generally equal to 1 U.S. dollar. To fulfill that promise, companies such as Tether need to maintain assets with strong and liquid properties that support each token in circulation.
USDT growth and USAT launch drive higher reserve requirements
Tether’s flagship stablecoin, USDT, is currently the largest in the world by market value. There are approximately $185 billion worth of USDT tokens in circulation. Consequently, Tether needs massive reserves to support its value.
Now, USDT boasts roughly 530 million users worldwide. The stablecoin issuer is adding around 30 million new users per quarter, indicating solid, consistent growth, he said. This rapid growth is one of the reasons the firm must further increase its Treasury bill holdings.
Real assets must back every token issued. Tether’s reserve strength is not limited to Treasury bills. The company also has roughly $6.3 billion in excess reserves, according to accounting firm BDO.
Moreover, Tether has a large gold reserve. The company owns roughly 140 tons of gold, Hines said, making it the thirteenth-largest gold holder in the world. Gold usually serves as a long-term store of value, providing Tether with an additional source of financial stability.
New USAT stablecoin and regulation push more Treasury investments
Tether’s Treasury bill purchases could increase even faster because of its newly launched USAT stablecoin. USAT was officially introduced late last month and is issued by Anchorage Bank.
Unlike USDT, USAT was designed specifically to meet U.S. federal stablecoin regulations under the GENIUS Act. This law requires regulated stablecoins to maintain full 1:1 backing with high-quality liquid assets.
Hines played an important role in shaping this law during his time as Executive Director of the White House Crypto Council under President Donald Trump. He stepped down from that role in August shortly after the GENIUS Act was signed into law.
Hines, who’s now at Tether, said the company is adjusting its reserves to meet these new regulatory standards. He explained that Tether is increasing its Treasury bill holdings as part of its efforts to comply with the GENIUS framework.
He also said that USDT and USAT are built to work well together, describing this as “reciprocity,” meaning the two stablecoins can operate smoothly with each other while remaining part of the same Tether system.
