In a significant financial milestone, Paolo Ardoino, CTO of Tether and Bitfinex, revealed on September 5, 2023, that the issuer of the popular stablecoin, Tether (USDT), now boasts an impressive $72.5 billion in holdings of U.S. Treasury bills. This substantial sum has propelled Tether to the position of the 22nd largest holder of U.S. Treasuries globally, surpassing even sovereign nations like the United Arab Emirates, Mexico, Australia, and Spain regarding Treasury holdings.
While @Tether_to reached 72.5B exposure in US t-bills, being top 22 buyer globally, above United Arab Emirates, Mexico, Australia, Spain, …$USDt is the most used stablecoin in the world, with a huge focus on emerging markets. For many of these communities USDt is a lifeline… https://t.co/7hC12Nhzdq
— Paolo Ardoino 🍐 (@paoloardoino) September 5, 2023
For many communities worldwide, USDT has become a financial lifeline, shielding them from rampant national currency inflation. However, this development sharply contrasts with China’s recent financial maneuvers, as the Asian powerhouse has rapidly divested nearly $481 billion from its peak holdings of U.S. Treasury debt. Notably, this reduction is significant and accelerating, according to the financial commentary platform Wall Street Silver, highlighting China’s gold pivot.
The divergent strategies employed by Tether and China have sparked varied reactions within the financial community. Suraj Chawla of GPU.NET raised concerns about the sustainability of relying on Tether’s U.S. Treasury holdings as a financial safety net for emerging markets. Chawla cautioned against building economies on potentially unstable foundations, emphasizing the need for genuine resilience.
Conversely, the crypto analytics platform BeastOnChain offered an alternative viewpoint, emphasizing that this situation underscores the expanding influence of emerging markets on Real World Assets (RWA). The platform highlighted the necessity of adopting a diversified, borderless approach to allow individuals worldwide to participate in these growing markets.
Tether’s growing Treasury portfolio and China’s swift exit from U.S. debt highlight evolving trends in international finance. Tether’s emergence as a crucial financial player in emerging markets comes with heightened scrutiny about the long-term stability of these economies, given its substantial investment in U.S. Treasuries.
In contrast, China’s strategic shift towards gold suggests recalibrating its financial holdings, potentially reshaping the global economic landscape. The path forward for both Tether and China will undoubtedly continue to be closely watched by financial experts and policymakers alike.
