Tether adjusts its asset allocation strategy to reduce U.S. Treasury purchases, increasing only by $7 billion in Q2.

Tether's audit report for the second quarter of 2025 shows that its purchases of U.S. Treasury bonds have significantly slowed, with only an additional $7 billion, a sharp decrease compared to $65 billion in the first quarter. Although Tether is still investing in Bitcoin, gold, and corporate equity, its increase in "cash equivalents" is limited, which may affect its compliance operations regarding the GENIUS Act.

Tether's purchase of US Treasuries has sharply decreased, which may indicate a strategic shift In Q2 2025, Tether only added $7 billion in US Treasury exposure, in stark contrast to the aggressive increase of $65 billion in Q1. This shift has raised questions in the market about its asset allocation direction, especially against the backdrop of the GENIUS Act, which mandates stablecoin issuers to hold a large amount of US Treasuries.

Existing positions: still primarily in US Treasuries, but the growth rate is slowing According to the audit report, Tether currently holds about $105.5 billion in U.S. Treasury bonds, as well as $24.4 billion in indirect exposure (such as overnight repurchase agreements and non-U.S. Treasury bonds, which may involve EU bonds to comply with MiCA regulations). This indicates that although the overall scale is still increasing, the enthusiasm for purchases has noticeably diminished.

(Tether Asset Reserves | Source: Tether)

Non-US debt assets performed moderately, cash equivalents showed slight fluctuations Apart from U.S. Treasury bonds, Tether's investments in other cash equivalents have almost come to a standstill, with non-U.S. Treasury assets decreasing by about 17 billion dollars and changes in categories like repurchase agreements being less than 1 billion dollars. This static asset allocation may pose compliance challenges for its future.

Strategy Shift: Increase Investment in Bitcoin, Gold, and Corporate Investments Tether has recently increased its investments in BTC, gold, and over 120 companies, but these assets are not considered reserve assets recognized by the GENIUS Act. CEO Paolo Ardoino stated that the current issuance of USDT has exceeded its U.S. Treasury asset by $50 billion, raising concerns about its regulatory measures.

Why reduce holdings? Possibly due to changes in the market and regulatory environment Although the reasons are still unclear, this may be related to changes in bond market interest rates, risk management, or the adaptation to MiCA regulations. Deeper changes may indicate that Tether is reassessing its stablecoin issuance model.

Conclusion: Tether's increase in US Treasury holdings has slowed down, suggesting that its asset allocation strategy is being fine-tuned. In the face of the dual regulatory challenges of the GENIUS Act and the MiCA regulations, its future investment direction and compliance path will have a profound impact on the stability and credibility of USDT.