2023-09-09 16:11:38
The company behind Tether, which is the largest stablecoin in the current crypto sector, recently wrote in a document regarding how by leveraging the US government bond, it creates continuous demand for the US government debt as collateral for the USDT issue. Currently, the company has nearly $73 billion of exposure to US debt, either directly or indirectly as collateral for reverse repos. Tether strengthens the stability of the American economy The document “Dynamics of Tether USDT and the US Treasury Department” wrote regarding this, highlighting that Tether has the 22nd largest exposure to the US national debt. Thus, their exposure is greater than that of the United Arab Emirates, Mexico or Australia. For Tether, this is a matter of trust in the US economy. Because the company supports the function of national government securities as “global reserve assets that underpin capital markets around the world”. Despite the fact that interest in these debts was influenced by geopolitical issues. While China and other countries have retreated significantly from the US debt in recent years, according to Tether’s document, their exposure represents a “call option” for the US economy and debt. Because the demand for dollars can be translated into the demand for US government securities/Treasury bills, which in the process also becomes a hedge for USDT. According to Tether, the issuance of USDT tokens equivalent to the dollar will contribute to the financial stability of the USA. Plus, it can also be seen as a lifeline in countries where inflation and the devaluation of fiat currency lead to serious economic problems – such as Venezuela or Argentina. The net result is that as the demand for USDT increases, its issuance will also accelerate. As a result, the demand for American debt will also increase. Tether is in a kind of intermediary role. Although the direct demand for US debt is decreasing, the demand for the USDT token is increasing. And since a significant part of Tether’s collateral is treasury bills, the demand for them also increases.
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