Tether’s $127 Billion in US Treasuries Expected to Rank Among Top Five Foreign Holders by 2033

Tether’s accumulation of U.S. Treasuries positions the stablecoin issuer to potentially rank among the top five foreign holders by 2033, assuming a realistic acceleration scenario based on current balances, recent purchasing activity, and the fluctuating threshold indicated by the U.S. Treasury’s TIC data.

This forecast presumes that Tether will continue to increase its holdings at a higher annual net rate each year, while the fifth-place threshold among foreign holders remains in flux.

As of June 30, the company reported approximately $127 billion in U.S. Treasury exposure, divided into about $105.5 billion of direct bills and $21.3 billion of indirect exposure.

This positions Tether as the 18th largest foreign holder of U.S. Treasuries currently, and it was the seventh largest purchaser in 2024.

According to the same disclosures, Tether’s net additions for 2024 were reported at $33.1 billion, averaging around $2.8 billion per month. Changes from quarter to quarter in early 2025 suggest a run rate consistent with that annual figure.

As per the U.S. Treasury’s Major Foreign Holders table, placements in July 2025 indicate Japan as the largest foreign holder at approximately $1.15 trillion, while Belgium, the fifth-ranked holder, is around $428 billion, a custodial figure that can fluctuate significantly month to month.

For context, the Federal Reserve reported about $4.20 trillion in Treasuries on its balance sheet in early October 2025, and Treasury data indicated outstanding Treasury bills at approximately $5.78 trillion mid-year, placing Tether’s holdings at nearly 2 percent of the bill market.

These reference points illustrate the magnitude of the gap Tether must bridge and the market capacity it engages.

The table below outlines scenario ranges for Tether’s ascent into the top five.

Assumption set	Acceleration (a)	Bar growth (g)	Years from mid-2025	Projected year
Base pace, slow bar	$0B/yr²	$0–$10B/yr	~9–13	2034–2038
Modest accel, slow bar	+$5B/yr²	$0–$10B/yr	~6–7	2031–2033
Modest accel, faster bar	+$5B/yr²	$30B/yr	~8–13	2033–2039
Higher accel, faster bar	+$8B/yr²	$30B/yr	~8	2033

The parameters reflect both Tether’s recent activity and the documented volatility in the fifth-place ranking.

Calculation transparency (skip if you dislike formulas)

The projection employs a straightforward, transparent model linked to those public series.

Let S0 represent $127 billion at mid-2025.

Let r0 denote the current net addition rate, $33.1 billion annually.

To capture an “accelerating buys” trajectory, let the annual net addition rise by a constant a each year, so Tether’s total after t years is S(t) = S0 + r0*t + 0.5*a*t^2.

The top five threshold is not fixed, so let B(t) = B0 + g*t, where B0 is $428 billion and g is the average annual change in the fifth-place threshold.

The intersection occurs when S(t) equals B(t).

The choice of g is significant because the fifth-place threshold includes custodial flows, such as shifts into and out of European safekeeping, which can vary by tens of billions without altering the underlying end ownership.

Belgium’s year-over-year movement into July 2025 exceeded $100 billion, indicating an unstable baseline. Thus, a range for g is applied that encompasses slower and faster historical periods rather than relying on a single outlier month.

Calculating Tether’s rise

Under a modest acceleration, for instance, if a equals $5 billion per year squared, Tether would add $33.1 billion in the first year, $38.1 billion in the second, then $43.1 billion, and so forth.

If the fifth-place threshold grows slowly, for example, if g equals $10 billion per year, the crossing is expected to occur around the 2032 to 2033 timeframe.

If the threshold increases more rapidly, for instance, if g equals $30 billion per year, the crossing shifts toward the mid-2030s.

Without acceleration, the same gap would take approximately a decade at the current pace and is highly sensitive to the trends of Belgium, the United Kingdom, China, and custodial centers.

The composition of top holders is influenced by custody location decisions made by offshore funds and banks that safeguard Treasuries for clients, which is why Belgium’s figures fluctuate more than those of Japan, the United Kingdom, or China.

Utilizing a range for g instead of a single historical delta aligns the projection with how that custodial channel behaves through rate cycles and balance sheet adjustments.

The model does not factor in growth from new stablecoin competitors, nor does it assume sudden policy shifts in reserve composition. It also does not assign any premium or discount to Tether’s indirect exposures that derive from money funds.

How Tether can become the top foreign holder of T-Bills.

A separate consideration is whether Tether could emerge as the largest foreign holder. Setting Japan’s July 2025 level at approximately $1.15 trillion as the target and applying the same accelerating buy trajectory for Tether, the crossing times extend and depend on Japan’s trends.

If Japan’s holdings grow by an average of $20 to $40 billion annually, a value of $5 billion per year squared would result in a crossing in the late 2030s to mid-2040s, while a value of $8 billion per year squared could advance the timeline by several years.

The arithmetic is straightforward; the gap from $127 billion to over $1 trillion is about one trillion dollars, necessitating sustained issuance growth, ongoing demand for bills and short coupons at Tether’s scale, and stablecoin market expansion that facilitates continuous net reserve inflows.

The central bank’s Treasury portfolio remains above $4 trillion, rendering a top overall ranking irrelevant to any practical horizon for a private issuer.

The mechanics behind these trajectories are observable in Tether’s statements and the structure of its reserves. The reserve composition is concentrated in cash and T-bills that ladder through short maturities, and interest income provides a secondary flywheel that can be retained or distributed.

If the firm reinvests a portion of that income into bills and maintains net issuance of USDT as market share expands, the acceleration parameter a remains positive over multiple years.

Conversely, if demand for stablecoins diminishes or if Tether allocates more towards non-Treasury investments, the effective acceleration would trend towards zero, delaying the crossing relative to the scenarios presented here.

The Treasury’s bill market size can accommodate additional purchases, and the public float increases as the Department of the Treasury manages cash balances. However, program composition, including the relative use of bills versus coupons, will influence how much of Tether’s incremental demand is directed towards the bill sector over time.

So, will Tether really breach the top 5?

The fifth-place threshold is not solely determined by country-level current account flows. Holdings are recorded at the location of the foreign holder that is the owner of record, meaning custodial centers can represent ultimate beneficial owners across various jurisdictions.

This is the practical reason for treating g as a range rather than a precise estimate.

For editorial clarity, the crossing year mentioned in the headline, 2033, aligns a modest, documented acceleration of Tether’s purchases with a conservative range for the top five threshold.

If Belgium’s reported holdings decline due to custody shifts, the crossing could occur sooner. If other hubs accumulate more rapidly, or if additional offshore funds consolidate safekeeping in Europe, the crossing timeline extends.

The final consideration for a forward look is whether the stablecoin market can sustain the reserve scaling implied by the scenarios.

Recent market data indicate that the sector is capable of funding several tens of billions of net new bills annually to private nonbank balance sheets.

This pace, combined with retained interest earnings and USDT issuance growth, provides the foundational case for a positive a.

The uncertainty surrounding the top five primarily relates to the moving threshold, not the availability of supply. The scale of foreign official and private holdings, along with the Federal Reserve’s balance sheet level, contextualizes Tether’s target and translates the scenario into a manageable set of figures.

Tether’s Treasury position and net additions create a plausible pathway to a top-five ranking by 2033, provided that annual net purchases continue to increase from the current pace and the fifth-place threshold grows within the historical ranges utilized here.

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