- Investments in tokens add stability and prevent the influence of massive sell-offs by individual players in the market.
- As it approaches its tenth anniversary, Tether celebrates its dominance as the leading global stablecoin and its regulatory transparency.
Tether, the company that issues the USDT stablecoin, has increased its investment in U.S. Treasury bonds, which now make up more than 80% of its total reserves.
According to Paolo Ardoino, CEO of Tether, this strategy has strengthened the company’s relationship with the US government, describing the latter as its “best friend.” Ardoino shared this information during an interview with Tom Farley, CEO of the Bullish exchange.
Ardoino revealed that Tether holds around $98 billion in Treasury bills, which places it among the largest holders of these instruments globally. This amount is comparable to the investments of Germany, which holds almost US$ 96 billion, and is close to those of South Korea, with more than US$ 100 billion.
The Tether executive described the company’s position as satisfactory, stating that it helps to diversify the ownership of US debt and increase the country’s financial stability.
“So, you send us dollars, we send you the same amount in USDT. You send the USDT tokens back to us, we send the dollars back to you. Then we invest the reserves in Treasury bonds and some other safe assets. It’s as simple as that,” the executive explained.
It was noted that Tether’s investments add a layer of security to the bond market, as they prevent a single player from being able to significantly influence through the massive sale of these assets.
“What Tether did very well was that it invented the stablecoin industry and also focused on the most important use and primary use case for stablecoins,” said Ardoino
The policy of investing in Treasury bonds was initiated in 2022 to increase the company’s liquidity. Since then, these investments have generated approximately $5.2 billion in proceeds during the first half of 2024.
Tether has never promoted the use of USDT in decentralized finance because its focus was to help people who “most needed to have an alternative payment system,” the CEO noted.
This investment approach comes against a backdrop of a global reduction in dependence on the U.S. dollar, led by China and Russia, which have been decreasing their holdings of U.S. debt.
In contrast to these countries, Tether has increased its investments, which strengthens the USDT stablecoin by providing a solid backing that allows it to be quickly converted into dollars.
With Tether’s tenth anniversary on the horizon, Ardoino reflects on how the company’s perception has improved since its early days, when it faced doubts about its reserves.
Today, Tether has established itself as the world’s leading global stablecoin and has strengthened its relationship with the U.S. government through strict compliance with local regulations.
In addition, it is notable that Tether is the only stablecoin that has integrated collaborations with agencies such as the FBI and the U.S. Secret Service.
