Washington considers stablecoin model to extend Treasury demand and US currency reach
The Trump administration is evaluating an overseas stablecoin initiative that would leverage private companies, particularly Tether, to extend dollar access beyond traditional banking channels and boost Treasury financing demand, according to reporting on a proposal under consideration in 2025.
Tether’s $114.96 billion in directly held US Treasury bills positions the stablecoin issuer as central to the initiative’s appeal. The company holds more than 60% of the stablecoin market and maintains a reserve portfolio that includes Treasury bills, reverse repo agreements, precious metals, Bitcoin, and secured loans totaling $187.75 billion as of June 30.
Federal Reserve Governor Stephen Miran outlined the rationale in a November 2025 speech, distinguishing between transfers from existing dollar holdings and demand among foreign savers with restricted dollar access. Treasury Secretary Scott Bessent connected stablecoins to broader dollar economy access and increased Treasury demand in a July 2025 statement on the GENIUS Act.
The proposal would involve the US State Department and the US International Development Finance Corporation, though specific details of potential partnership structures remain undisclosed. No formal deal has been confirmed, and the timeline for launch or announcement has not been specified.
Tether’s reserve structure and regulatory history
Tether shifted its reserve strategy in October 2022, replacing commercial paper with US Treasury bills to address liquidity concerns. The company’s Treasury holdings carry a weighted average maturity below 90 days and generate returns that do not flow contractually to USDT holders.
The stablecoin issuer received an unqualified audit opinion from KPMG US on August 13 for its 2025 financial statements, marking a departure from years when the absence of audited financial statements dominated reserve debates. Tether reported $4.11 billion in reserves above liabilities and $1.50 billion in second-quarter net operating profit.
This audit represents a significant shift in transparency. In October 2021, the Commodity Futures Trading Commission ordered Tether to pay $41 million for misleading representations between 2016 and 2019 that USDT was fully backed by fiat currency in bank accounts. The regulator found Tether held other assets and relied on arrangements that did not match those claims.
Dollar access and policy alignment
The overseas stablecoin model addresses a stated policy objective: extending dollar access to foreign savers and markets with restricted currency options. By positioning Tether as a potential distributor, the proposal would combine private-sector infrastructure with government financing objectives.
Tether’s Treasury portfolio generates returns, but the company does not distribute those earnings to USDT holders under the current contract structure. The reserve composition reflects diversification beyond Treasury bills, with $18.84 billion in precious metals, $5.80 billion in Bitcoin, $18.63 billion in overnight reverse repo agreements, and $13.45 billion in secured loans.
The initiative remains under consideration with no confirmed launch date or formal agreement announced. The involvement of the DFC and State Department suggests a coordinated government approach, though specific financing structures have not been detailed.
