Tether’s US Treasury holdings hit $127 billion, surpasses South Korea’s reserves

Tether, the issuer of the world’s largest stablecoin (USDT), has reached a staggering $127 billion in US Treasury holdings—surpassing South Korea’s reserves and solidifying its position as a heavyweight in global debt markets.

The latest attestation report for Q2 2025 reveals a $7 billion quarterly increase, with $105.5 billion held directly and $21.3 billion indirectly.

This milestone underscores Tether’s growing influence as a private entity now ranking above sovereign nations like Norway, Brazil, and Germany in US debt ownership.

The surge in Tether’s US Treasury holdings coincides with a 19% rise in USDT’s market cap this year, now at $163.6 billion, as demand for stablecoins accelerates globally.

How Tether became a top-tier US debt holder

Tether’s ascent to the 18th-largest holder of US Treasurys reflects aggressive reserve accumulation amid rapid stablecoin adoption. The company added $26 billion in USDT supply year-to-date, leveraging its dollar-pegged tokens to buy more government debt.

“Q2 2025 affirms what markets have been telling us all year: Trust in Tether is accelerating,” said Paolo Ardoino, Tether CEO, in the attestation report.

Analysts note that Tether’s US Treasury holdings now exceed South Korea’s $124.2 billion and trail Saudi Arabia’s $127.7 billion by a narrow margin.

Critics, however, question whether a private crypto firm should wield such fiscal clout.

“Tether’s dominance in Treasurys blurs the line between traditional finance and decentralized ecosystems,” remarked a senior economist at the IMF, speaking anonymously due to sensitivity.

Why this matters for crypto and traditional markets

1. Market Confidence: Tether’s US Treasury holdings backstop USDT’s $1 peg, reassuring users of its solvency.

2. Monetary Influence: The firm’s debt purchases make it a quasi-institutional player, akin to central banks.

3. Regulatory Scrutiny: Its growth may invite stricter oversight, especially if USDT’s dominance continues unchecked.

“Told you so,” tweeted Ardoino, sharing a meme celebrating the milestone. The boast highlights Tether’s bullish stance, but experts warn of risks. “Concentration of Treasurys in a single private entity could pose systemic risks if liquidity crunches occur,” noted a Fitch Ratings analyst.

The road ahead: Can Tether sustain its momentum?

With Tether’s US Treasury holdings nearing Saudi Arabia’s reserves, the company is poised to climb further in global rankings. However, challenges loom:

• Interest Rate Sensitivity: Falling yields could pressure returns on its debt portfolio.

• Stablecoin Competition: Rivals like Circle (USDC) are also ramping up Treasury investments.

• Political Backlash: US lawmakers have criticized crypto firms for “hoarding” sovereign debt.

For now, Tether’s growth shows no signs of slowing. As traditional finance giants like JPMorgan embrace stablecoins, Tether’s US Treasury holdings may soon rival those of mid-sized central banks—a once-unthinkable feat for a crypto-native company.

Key points:

• Tether’s $127 billion US Treasury holdings outpace South Korea’s reserves.

• USDT’s market cap surged 19% in 2025, hitting $163.6 billion.

• Experts debate the risks of private firms amassing sovereign debt.