Is Tether building ‘Fed of crypto’ with sovereign-sized reserves?

Tether’s latest reserves report reveals a stablecoin issuer operating on a scale typically reserved for nations.

According to its Q2 2025 attestation from BDO, the company holds $162.57 billion in assets, surpassing its liabilities of $157.11 billion, resulting in a $ 5.46 billion surplus. This cushion, above what’s needed to redeem all tokens, is rare in the stablecoin market—and almost unheard of in crypto.

Recent data from Messari highlights Tether’s scale: with $127 billion in U.S. Treasuries, it now holds more than South Korea, Germany, and the UAE, ranking as the 18th largest holder of U.S. government debt globally.

Tether is the only private entity in this league, positioned between Saudi Arabia and several G20 nations.

A balance sheet that looks like a central bank’s

Side by side, Tether’s reserves and the Federal Reserve’s balance sheet share a surprisingly similar structure — despite a 40x size gap.

• U.S. Treasuries are the backbone for both — $105.5 billion for Tether, $4.77 trillion for the Fed.
  
• Short-term liquidity instruments, such as reverse repos and money market funds, play a similar stabilizing role.
  
• The difference is in diversification: Tether keeps $8.9 billion in Bitcoin and $8.7 billion in gold — a blend of digital and hard assets no major central bank holds.

At first glance, comparing Tether’s surplus to the Federal Reserve’s resources might seem like a stretch — the Fed’s balance sheet is vastly larger. But the analogy works because the two operate under fundamentally different rules.

The Fed doesn’t keep a surplus: any net income it earns is remitted to the U.S. Treasury, so it doesn’t build an equity buffer. Tether does — and that $5.47 billion represents about 3.4% of its total assets, a stronger equity position than many banks maintain under Basel III capital standards. 

Tether also distributed $7.357 billion in dividends during the first half of the year — a payout size that underscores both its profitability and the scale of its operations.

For the stablecoin market, it’s unprecedented. By comparison, Circle’s USDC reserves — $55.7 billion as of Aug. 7 — are structured for near one-to-one matching between assets and liabilities. The Circle Reserve Fund, managed by BlackRock, holds about 60% in U.S. Treasury repurchase agreements and 39% in U.S. Treasury debt, leaving only a modest equity buffer compared to Tether’s sovereign-sized cushion.

It’s precisely the kind of monetary backstop central banks aim for to absorb shocks without destabilizing their currency — positioning Tether as a central clearinghouse of dollar liquidity in crypto.

The El Salvador move and regulatory posture

In January 2025, Tether shifted its base from the British Virgin Islands to El Salvador — the only country to adopt Bitcoin as legal tender — after securing a Digital Asset Service Provider (DASP) license. It still maintains its Money Services Business (MSB) registration with the U.S. Financial Crimes Enforcement Network (FinCEN), obligating it to comply with anti-money laundering (AML) and counter-terrorist financing (CTF) rules, including filing Suspicious Activity Reports (SARs) and Currency Transaction Reports (CTRs).

This dual stance — operating from a Bitcoin-forward jurisdiction while maintaining U.S. compliance channels — demonstrates Tether’s positioning at the intersection of crypto-friendly regulation and global financial oversight.

Why this matters for stablecoins

If Tether is the “crypto Fed,” its surplus is the closest thing to a monetary policy safety net in the stablecoin market. It allows Tether to absorb shocks without immediately tapping into its reserves, and it gives the company the firepower to invest in infrastructure, strategic partnerships, and even non-crypto sectors without threatening redemption guarantees.

In traditional finance, central banks exist to backstop liquidity and maintain confidence. In crypto, Tether is doing both — privately, at scale, and with an asset mix more diversified than most national treasuries. The bigger question is whether this model becomes the template for the next generation of stablecoins, or whether Tether will remain the outlier that built the Fed of crypto before anyone else could.