Market commentator The Kobeissi Letter highlighted on Monday the massive scale of Tether (CRYPTO: USDT) in the U.S. treasuries market.
Tether’s Profit Strategy Via US Treasuries
In an X post, Kobeissi Letter said that the “stablecoin market is ripe for disruption,” emphasizing how Tether has become the 17th-largest holder of U.S. sovereign debt, totaling roughly $135 billion. This places the company ahead of big economies such as South Korea, Saudi Arabia and Germany.
When a user or institution wants to buy USDT, they deposit dollars into a Tether bank account. Tether then invests these dollars to buy treasury bills, earning billions in interest income.
Notably, Tether reported more than $10 billion in net profit across the first three quarters of 2025 — more than many S&P 500 banks — and holds $6.8 billion in excess reserves.
“Stablecoin holders are effectively ‘lending’ Tether capital at a 0% interest rate, which is then flipped on Treasuries,” The Kobeissi Letter stated.
Kobeissi Letter pointed to JupUSD, a USD-pegged stablecoin launched by the Jupiter exchange, which returns the yield from the underlying reserves to the ecosystem. However, the yields are accessible only by supplying JupUSD into Jupiter’s lending protocol, not by holding JupUSD directly.
The GENIUS Act: A Game Changer For Stablecoins?
The increased exposure comes following the passage of the GENIUS Act, also known as the stablecoin bill. The legislation establishes a regulatory framework for the sector, which is valued approximately $315 billion.
Treasury Secretary Scott Bessent predicted last year that stablecoins could unlock $2 trillion in demand for U.S. treasuries.
Interestingly, Tether CEO Paolo Ardoino said last year that the company has no plans to go public, citing its profitability and conservative management as key reasons behind the decision. Tether relocated its operations to El Salvador earlier this year.
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