In 2024, the cryptocurrency company Tether was the seventh-largest buyer of U.S. Treasury bonds globally. The company increased its holdings by 33 billion U.S. dollars — a larger investment than what has been seen from countries such as Canada, Taiwan, and Mexico. This investment is roughly equivalent to Iceland’s GDP for the same year.

The chart above underscores Tether's growing influence in global finance. Data provided by the CEO of Tether, Paolo Ardoino in an X post.

This underscores the growing influence of stablecoins in the global financial system. Tether issues the stablecoin USDT, which has a market value of around 143 billion dollars. Stablecoins are cryptocurrencies that are pegged to the value of fiat currencies. They are backed by investments in government securities and deposits in the corresponding currency. Initially, these coins were used exclusively for cryptocurrency trading, but in recent years, their usage has expanded beyond crypto markets and they are increasingly being used in commerce and global payment systems. These coins can be sent anywhere instantly and at low cost, offering a significant advantage over traditional money transfers.

At the same time, the new U.S. government has issued clear signals that it wants to support the development of stablecoins through a clear regulatory framework. It has specifically stated that stablecoins could become a key pillar in the financial system of the future — in both payments and commerce — and could help reinforce the continued role of the U.S. dollar as the world’s reserve currency. U.S. authorities have also mentioned that the market value of stablecoins could soon reach trillions of U.S. dollars.

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