Stablecoin Giant Tether Overtakes South Korea and UAE in U.S. Treasury Holdings with $135B Portfolio

, the stablecoin giant, has now climbed into the top tier of U.S. Treasury investors, now holding about $135 billion in U.S. government debt. This development has pushed the stablecoin issuer past the holdings of nations like South Korea and the United Arab Emirates, marking a significant milestone for stablecoins as their issuers gain unprecedented influence in traditional finance (TradFi) markets.

Analysts say Tether’s accumulation of Treasuries highlights its evolving role in global liquidity and stablecoin reserve management. With the ranking rise, Tether now stands alongside sovereign states in debt holdings, showing the growing intersection between digital assets and traditional finance — especially as stablecoin issuers increasingly influence global liquidity flows. Tether’s rise reflects how blockchain-based institutions are becoming significant players in debt markets once dominated exclusively by governments..

Tether Shows Stablecoins Have a Place in the Global Economy

Tether’s rise in U.S. Treasury holdings has been swift. According to data compiled by , its direct and indirect exposure to Treasury bills grew from about $98.5 billion at the end of Q1 2025 to over $127 billion by mid-year, and now reportedly around $135 billion.

The company’s shift toward Treasuries aligns with global regulatory trends that require stablecoin issuers to back their tokens with highly liquid, low-risk assets. For example, the U.S. and similar frameworks require issuers to hold low-risk, liquid assets in support of stablecoins. The move by Tether to allocate so heavily into Treasuries signals that the company is positioning its backing assets for both regulatory compliance and yield generation.

Tether’s ascendancy in the Treasury-holder rankings carries wide-ranging implications for crypto and the global financial landscape. First, it reinforces the place of stablecoins as prominent institutional actors. A company originally built for tokenization is now moving into a domain once restricted to central banks and sovereign wealth funds — that’s more than a signal. 

Countries like South Korea and the UAE — once firmly among the largest holders of U.S. debt — now face the reality of non-sovereign entities occupying adjacent rankings.

Impact on Crypto and the Digital Economy

With Tether acting at a sovereign-like scale, its demand for short-term Treasury bills may influence yields and liquidity. Some suggest that large-scale purchases of stablecoins can tighten supply in Treasury bills, potentially lowering short-term yields.

The firm’s growing U.S. debt exposure also reinforces the link between digital dollars (USDT) and the traditional dollar ecosystem, underscoring the extent to which

For the broader crypto market, it’s left to be viewn whether Tether will continue growing its Treasury holdings at the current pace to climb into the top 10 global holders over the next few years. 

Looking ahead, Tether’s ascent raises broader questions for regulators. As stablecoins become systemically relevant, policymakers may revisit standards for reserve transparency, asset composition, and cross-border oversight — reshaping the boundary between crypto innovation and monetary policy.