Tether's $114 Billion Appetite Fuels Washington's Stablecoin Initiative

The US government has a reason to keep Tether around, with its stablecoin USDT being worth over $114 billion. This is because the company's insatiable appetite for American debt makes it a valuable customer for the state. In fact, Tether's reserve portfolio now consists mainly of short-term US Treasury bills, which are highly liquid and provide a reliable source of income.

This shift in Tether's reserves was prompted by a fine imposed on the company by the CFTC in 2021 over misleading representations about its backing. Since then, Tether has moved towards holding more transparent and easily verifiable assets, such as US Treasury bills.

The US government is now considering an initiative to extend dollar use through stablecoins, with possible joint ventures with private companies like Tether. This would allow the state to tap into a new customer base and create demand for short-term debt instruments.