- Main event: Tether labeled a quasi-sovereign allocator; growing impact on markets.
- Tether holds substantial US Treasuries, influencing dollar funding dynamics.
- Shift impacts stablecoin sector and systemic risk levels globally.
Tether, recognized as a quasi-sovereign allocator due to its substantial US Treasury holdings, announces plans to discontinue support for several blockchains by September 2025, impacting liquidity flows.
The company’s enhanced position in global markets introduces systemic risks, prompting shifts in stablecoin sectors and liquidity management while raising concerns over reserve transparency and centralization.
Tether’s Influence in Global Markets
Tether is now recognized as a quasi-sovereign allocator due to its significant US Treasury holdings. This change comes as Tether plays an increasingly pivotal role in global dollar funding markets and the stablecoin sector.
Paolo Ardoino, CEO of Tether, emphasized the company’s strategy to adapt by closing support for legacy chains. This lets Tether concentrate on scalable, developer-rich platforms to promote stablecoin adoption.
“As the digital asset ecosystem evolves, Tether remains committed to adapting alongside it. Sunsetting support for these legacy chains allows us to focus on platforms that offer greater scalability, developer activity, and community engagement — all key components for driving the next wave of stablecoin adoption.” — Paolo Ardoino, CEO, Tether
Market Position and Impacts
The designation as a quasi-sovereign allocator highlights Tether’s impact on the market, aligning it with central banks. This shift influences liquidity in non-supported blockchains and reallocates flows to others like Ethereum and Tron.
Tether’s financial influence equates to holding substantial US Treasuries. As the seventh-largest buyer of these assets, Tether’s market positioning affects stability and perceptions of safety amid market volatility.
On-chain data shows Tether’s pivot leading to total value locked changes. Networks losing Tether support might see value outflows. Tether’s Treasury holdings ensure USDT stability but also present systemic risks due to balance sheet opacity.
“Tether’s ascent as a top-10 foreign buyer signals a structural shift: Stablecoin issuers are no longer just liquidity users within crypto, but systemically relevant investors in global sovereign debt markets.” — Marc Arjoon, Research Analyst, Blockworks
Finally, the broader market response remains varied, with governance tokens and cryptocurrencies like ETH and BTC indirectly affected. Tether’s Treasury strategy is a new systemic player in sovereign debt, shaping risk and liquidity environments.
