This article is reprinted with authorization from Automatic Observation Beating, author: Rhythm Editorial Department, copyright belongs to the original author.
As of the third quarter of 2025, Tether, the world's largest stablecoin issuer, holds $135 billion in U.S. Treasury bonds. This scale has surpassed several developed countries, including Germany, ranking 17th.
The Federal Reserve is losing control over the dollar.
On November 7, 2025, at the Harvard Club in New York. In a closed-door summit, Federal Reserve Governor Stephen Miran stood at the podium, his face filled with the unique anxiety of policymakers. As a newly appointed Federal Reserve governor by Trump, this was his first significant public speech after taking office.
He stated that the growth of stablecoins is suppressing the global "neutral interest rate." This is a core reference for measuring the "ideal price" of funds, and the Federal Reserve calibrates its direction against it with every interest rate decision. Now, stablecoins have become the elephant in the room worth trillions of dollars, which the Federal Reserve can no longer ignore.
This is not the first time the Federal Reserve has felt anxious about a private company's influence on monetary policy.
On June 18, 2019, Facebook released the white paper for its stablecoin project, Libra.
Zuckerberg's ambitions were evident. He did not intend for Libra to help the Federal Reserve issue a digital dollar but rather to create an entirely new "dollar."
Libra aimed to be pegged not to a single dollar but to a basket of currencies, including the dollar, euro, yen, pound, and Singapore dollar. From its inception, Libra sought to challenge the dollar's central position as the global reserve currency.
What terrified Washington even more was the resources behind Libra. 27 global giants became its founding members, including Visa, Mastercard, PayPal, Uber, Lyft, Spotify, and others. These companies cover various fields such as payments, transportation, music, and e-commerce.
Facebook itself has 2.7 billion users, nearly one-third of the global population. If Libra successfully launched, it would overnight become one of the most widely used currencies in the world.
Washington could not tolerate such a challenge.
On October 23, 2019, Zuckerberg sat alone in the congressional hearing room.
The hearing lasted a full six hours. Rather than questioning, it felt more like a trial. Lawmakers took turns, addressing issues from data privacy to antitrust, from money laundering risks to national security, with every question hitting the mark.
Zuckerberg attempted to explain that Libra would be subject to strict regulation, would cooperate with the Federal Reserve, and would serve unbanked populations. But these defenses seemed to the lawmakers merely as excuses to mask ambition.
The pressure quickly transferred to Libra's partners. In October 2019, just before and after the hearing, several giants announced their withdrawal from the Libra project. These companies had large lobbying teams in Washington and understood better than anyone what it meant to remain in Libra.
Later, Libra attempted to compromise for survival. It abandoned the basket currency peg plan and instead launched a stablecoin pegged to a single dollar. But these efforts were too late.
On June 24, 2021, a breakfast meeting inside the U.S. Treasury building. Seated at the table were Treasury Secretary Janet Yellen and Federal Reserve Chairman Jerome Powell. Their only topic was whether to give Facebook's stablecoin project the green light.
Powell's attitude was clear; he was willing to approve a trial run. He believed the design was cautious enough to avoid risks like money laundering and could even set standards for the industry. But Yellen's response sentenced this billion-dollar project, which carried Zuckerberg's digital currency dream, to death.
"This is your decision," Yellen said, "but if you do this, I can't protect you."
This conversation marked the complete end of Facebook's digital currency dream. However, while Washington's regulators celebrated, believing they had killed a threat capable of challenging the dollar's hegemony, they failed to notice that another real threat was growing wildly in the shadows of the financial world.
In the same month that Libra was sentenced to death, another stablecoin, USDT issued by Tether, quietly surpassed a circulation of $60 billion.
Regulators killed Facebook's Libra but overlooked Tether.
Washington could so easily kill Libra because Facebook is a publicly traded company regulated by the U.S., headquartered in Menlo Park, California, and its founder Zuckerberg is a U.S. citizen. The law can control it, and threats can be managed.
But Tether is registered in El Salvador, and CEO Paolo Ardoino is Italian, representing a typical crypto "nomadic company." U.S. law cannot reach it.
From the release of the Libra white paper in June 2019 to the complete death sentence of Libra in January 2022, in just two and a half years, Tether's circulation skyrocketed from $4 billion to nearly $80 billion, an increase of nearly 20 times. By the third quarter of 2025, this number had reached $174 billion. While Washington was busy strangling Libra, Tether was expanding rapidly.
In many countries and regions, obtaining USDT is much easier than obtaining dollars.
To get dollars, you need a bank account, identity verification, compliance with anti-money laundering regulations, and face various restrictions and fees for cross-border transfers.
To obtain USDT, you only need a wallet address. No identity verification, no bank account, no waiting for approval, and trading is available 24/7 with almost no barriers for cross-border transfers.
Becoming a USDT user is even simpler than becoming a Facebook user. Facebook requires users to register an account and provide personal information, while USDT does not require registration at all.
In Bolivia, since the lifting of the cryptocurrency ban in June 2024, the amount of crypto payments surged by 630% in just one year, reaching $430 million, with nearly 90% of transactions using USDT. In the panic of continuous devaluation of the local currency, USDT became their lifeline against inflation and wealth preservation. Now, an ordinary Bolivian can directly use USDT on their phone to buy a BYD car.
In Argentina, with an inflation rate exceeding 200%, more and more people are starting to use USDT to pay rent and receive salaries. In Turkey, where the lira's exchange rate fluctuates violently, importers use USDT to lock in costs and avoid exchange rate risks. In Nigeria, strict foreign exchange controls make it difficult for small and medium-sized enterprises to pay overseas suppliers, and USDT has become their only option to bypass restrictions.
From Buenos Aires to Istanbul, from Lagos to Hanoi, USDT is becoming the "hard currency" of the third world. In these countries, USDT is easier to obtain and more popular than the dollar.
However, Tether's ambitions go far beyond just getting more people to use USDT.
The $135 billion in U.S. Treasury bonds it holds is not just an astonishing number but a symbol of power. Holding such a massive amount of U.S. debt means Tether can impact the U.S. Treasury market by selling or increasing its holdings at critical moments, thereby influencing the dollar's interest rates and exchange rates. Tether is no longer a "tool" of the dollar but a "creditor" of the dollar system.
In addition to holding U.S. Treasury bonds, Tether is also reserving gold and "digital gold" Bitcoin.
In 1971, Nixon unilaterally announced the decoupling of the dollar from gold, leading to the collapse of the Bretton Woods system. This freed the dollar from the constraints of gold, making it a purely fiat currency and granting the Federal Reserve unlimited money printing power. For half a century, the world has lived under this new system.
But now Tether is attempting to reverse all of this, establishing an upgraded Bretton Woods system. It is no longer satisfied with merely being the "digital twin" of the dollar; it is building a triple insurance for its digital dollar.
The first layer is U.S. Treasury bonds, which inherit and utilize the existing order.
The second layer is gold, a return to the old order. As of September 2025, Tether's gold reserves were valued at over $12 billion, averaging about one ton of gold purchased per week over the past year. Tether has even begun to poach two of the world's most senior precious metals traders from top global investment bank HSBC.
The third layer of insurance is Bitcoin. Since 2023, Tether has been using 15% of its net profits to buy Bitcoin and has quietly accumulated over 90,000 Bitcoins, worth $10 billion, making it the sixth-largest holder of Bitcoin globally.
What would it mean if one day Tether decided to change the assets pegged to USDT to a basket of U.S. Treasury bonds, gold, and Bitcoin?
It would mean that at a time of high global inflation and wavering confidence in the dollar, a new currency that is "harder" than pure fiat dollars is born. It would act like a massive black hole, sucking away global trust in the dollar.
Tether's CEO Paolo Ardoino publicly stated in October 2025: "Bitcoin and gold will outlast any other currency."
The implication of this statement is clear; when Tether believes the time is right, it can switch its pegged assets from the dollar to what it considers more "durable" assets.
Back then, Washington refused to let Zuckerberg issue a new dollar. Now, a company registered in El Salvador holds more U.S. Treasury bonds, gold, and Bitcoin.
They killed the competitor that came knocking but nurtured an empire that learned to print its own money.
Related: As staking and RWA surge, the yield gap between cryptocurrencies and traditional finance narrows.
Original article: “Federal Reserve Governor Stephen Miran Voices Concern Over the Massive Growth of Stablecoin Issuance”
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