U.S. Treasury Report Highlights Tether's $102.5 Billion Impact on Treasury Demand

Oct 31, 2024, 07:07 PM

The U.S. Treasury has released a report highlighting the significant impact of stablecoins on the demand for Treasury bills. The report notes that the growth of stablecoins, particularly Tether, has driven a substantial increase in the purchase of short-term U.S. Treasuries. Tether alone holds $102.5 billion in U.S. Treasury holdings, rivaling the holdings of entire nations such as Australia and Spain. The Treasury's report also suggests that stablecoins are becoming too significant to ignore and proposes the eventual replacement of stablecoins with a Central Bank Digital Currency (CBDC) to mitigate financial stability risks. Additionally, Tether has reported a net profit of $2.5 billion for Q3 2024, bringing its year-to-date profit to $7.7 billion, largely driven by gains from U.S. Treasuries and gold holdings. Tether's USDT circulation has reached nearly $120 billion, with $81 billion invested in short-dated Treasuries.