Big Take: The Crypto Giant Amassing US Debt

Summary

Podcast Episode Summary
Podcast: Everybody's Business
Episode: Big Take: The Crypto Giant Amassing US Debt
Date: April 13, 2026
Hosts: Stacey Vanek Smith (for Sarah Holder and David Gura), with reporting from Todd Gillespie
Guests: Unnamed Crypto Industry Analyst, quotes from Paolo Arduino (CEO of Tether)

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Episode Overview

This episode delves deep into Tether, the mammoth yet secretive cryptocurrency company whose core product, the stablecoin USDT, is not only reshaping the crypto landscape but has become a major player in the global debt market—especially US debt. With Tether’s pivotal role in digital transactions, growing regulatory ties, and a business model amassing billions in US Treasuries, the episode examines Tether’s rise, its growing influence in US financial and political systems, the risks and opportunities it presents, and what its continued expansion means for the broader economy.

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Key Discussion Points & Insights

1. Tether’s Origin and Business Model

• Tether issues a “stablecoin,” USDT, which is pegged 1:1 to the US dollar but operates outside traditional finance.
• The core idea (libertarian-rooted): offer a digital dollar alternative outside central bank control, immune from inflationary policies.
  • [05:04] Crypto Industry Analyst: "It's pegged. Yeah, exactly. It's tethered. Right. That's the whole point."
• USDT’s stability and instant transferability make it essential for remittances and payments, especially in emerging markets.
  • [06:38] Crypto Industry Analyst: "Tether allows you to do that with minimal fees, essentially. So it basically is a much more efficient way of doing that, of processing payments."

2. Controversies and Criticisms

• USDT has been used for illicit transactions—but Tether claims blockchain transparency allows for easier tracing than cash and states it actively works with authorities.
  • [07:33] Crypto Industry Analyst: “...once you can identify whose wallets are on the other side...it allows you to freeze that actually better than you would from instance with cash..."
  • [08:01] Todd Gillespie (reading Tether statement): “Tether...maintains a zero tolerance policy toward illicit activity.”
• Tether’s reserves have long been opaque.
  • No full audit to date; regulators fined Tether for misrepresenting its reserves and barred the company from New York. ([08:53] Todd Gillespie)
  • Committed to a full audit by the end of 2026.

3. Regulatory Environment and Political Connections

• The second Trump administration ushered in a friendlier era for Tether and stablecoins.
  • Commerce Secretary Howard Lutnick—whose children directly benefited from Tether—holds notable sway ([09:35] Crypto Industry Analyst).
  • Potential conflicts of interest as Lutnick’s assets and Tether’s business overlap.
• Passage of the GENIUS Act established US stablecoin regulations, requiring these tokens to be backed by US Treasuries and thus integrating stablecoins further into the US debt framework.
  • [10:59] Crypto Industry Analyst: “So not just Tether, but also Circle...are basically now given guardrails to issue tokens that are compliant...and also mandate them to back their currencies...with reserves of US Treasuries...because...the more buyers you have for US Treasuries, it allows you to lower the cost of your debt."

4. Tether as a US Debt Giant

• Tether’s holdings in US Treasuries now rival those of nation-states, with $135 billion worth (as of late 2025), making it the 17th largest holder of US debt in the world—larger than most foreign governments.
  • [11:51] Todd Gillespie: “…the only entity in the top 20 that was not a country.”
  • This buildup helps the US government by lowering borrowing costs and strengthening the dollar’s global position.
• However, reliance on stablecoin demand for US debt introduces new risks if there’s a downturn or a run on Tether.
  • [12:36] Crypto Industry Analyst: “If there’s a run on a stablecoin...that leaves your whole economy open to potentially a lot of...danger on a financial level.”

5. Tether’s Profits, Expansion & Diversification

• Tether made $10 billion in profit last year—unprecedented for a company with just 300 employees.
  • [16:23] Todd Gillespie: "Last year, with only 300 people on staff, Tether reported a profit of $10 billion."
• Currently seeking a $500+ billion valuation—on par with world-changing companies like SpaceX and OpenAI.
  • [16:45] Crypto Industry Analyst: "It is now trying to raise money at a 500 billion plus dollar valuation..."
• Diversifying investments into land in South America, commodity trading, and huge gold reserves (70 tons last year, more than nearly any central bank).
  • [17:26] Todd Gillespie: “Last year Tether bought 70 tons of gold. That is more than the reported purchases of almost any central bank.”
• Adopting gold and US Treasuries as hedges while maintaining a sizable Bitcoin position.
  • [17:51] Crypto Industry Analyst: “They are investing heavily in very, very safe assets. But they also see Bitcoin as increasingly a safe asset."

6. Penetrating the US Market: USAT Stablecoin

• Post-GENIUS Act, Tether created USAT—a new, regulation-compliant, dollar-pegged coin for the US market.
  • Backed exclusively by US Treasuries (no gold/Bitcoin allowed for reserve).
  • Focus: Not a hedge against inflation (unlike overseas) but as a payment processor to bypass credit card fees and slow settlements.
  • [20:18] Crypto Industry Analyst: "What they're enabling people to do here...is that you can avoid things like credit card fees if you're a restaurant."
  • [20:33] Crypto Industry Analyst: "You can avoid a 3% credit card fee, for instance...the transaction would be settled immediately."
• Investment in US-facing digital platforms (e.g., Rumble, a conservative video platform) to spread adoption.
  • [21:03] Crypto Industry Analyst: “…looking for digital platforms in the US to invest into…and that allows them to increase their use case, increase their relevance…”

7. Political and Economic Influence

• Tether is increasing its lobbying and political spending in the US, supporting White House initiatives and planning to back political spending groups, leveraging profits and influence. ([21:34] Todd Gillespie)
• Portfolio now includes ~130 companies worldwide, with questions about the impact and reach of this financial power.

8. Systemic Risks and Uncertainties

• Despite expansion, stablecoin adoption has plateaued recently amid broader crypto market volatility.
  • [22:16] Crypto Industry Analyst: "We've seen stablecoin adoption actually plateau a bit recently..."
• Concerns about systemic risk if Tether were to collapse or dramatically shift its US Treasury holdings.
• Much remains unknown about the company's reserve management and future direction.

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Notable Quotes & Memorable Moments

• Paolo Arduino, CEO of Tether (on the company’s vision):

  • “Tether is building not just to survive Armageddon, but to thrive in Armageddon.” [03:03]

• Stacey Vanek Smith:

  • “That's like private island money.” [10:06] (on the value of a potential 5% stake in Tether)

• Crypto Industry Analyst:

  • “They have been buying land in South America. They've been supporting commodity trading companies. They've been buying up gold, huge, huge quantities.” [17:17]

• Crypto Industry Analyst (on risks):

  • “If there’s a run on a stablecoin...that leaves your whole economy open to potentially a lot of danger on a financial level.” [12:36]

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Timestamps for Important Segments

| Segment Description | Timestamp | |---------------------------------------------------|-----------| | Paolo Arduino pitches Tether's survival thesis | 01:59–03:26 | | Tether’s business model and stablecoin basics | 04:52–06:05 | | Tether’s role in remittances and emerging markets | 06:38–07:17 | | Illicit activity and Tether’s controls | 07:17–08:01 | | Reserve controversies and lack of audit | 08:47–08:53 | | Regulatory shift under second Trump administration | 09:35–10:59 | | GENIUS Act and stablecoins’ impact on US debt | 10:59–12:36 | | Tether’s US Treasury holdings | 11:51–12:20 | | Risks if Tether’s demand decreases | 12:28–13:20 | | Tether profits, expansion, and diversification | 16:23–17:34 | | Tether’s investments in gold and Bitcoin | 17:26–18:23 | | USAT stablecoin and US market focus | 18:39–20:49 | | Tether’s investments in US digital platforms | 21:03–21:34 | | Lobbying and political spending in the US | 21:34–21:55 | | Closing insights and systemic risk concerns | 22:16–23:26 |

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Conclusion

The episode paints a picture of Tether as a vastly influential yet somewhat enigmatic player whose near-$200 billion in assets—and newly cemented regulatory acceptance—are driving fundamental shifts in global finance and US public debt markets. While Tether’s products offer efficiencies and alternatives to traditional financial systems, their unorthodox business practices, political ties, and opaque reserves raise urgent questions about systemic risk, regulatory capture, and the unknowns of integrating crypto giants into the very heart of global finance.

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For more insight and unlimited access to Bloomberg reporting, visit bloomberg.com/podcastoffer.

Transcript

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Bloomberg Audio Studios Podcasts, Radio News

[Todd Gillespie]

in late January, Todd Gillespie was at a hotel in El Salvador listening to a man in a T shirt and track pants talk about the global financial system and the end of the world as we know it.

[Paolo Arduino]

New regulations plus, you know, wars plus economy, instability, monetary debasement, AI and all that. These are all variables. If you look at all of them, you can predict the trajectory of society.

[Crypto Industry Analyst]

I was in this big ballroom in this hotel in San Salvador, darkened lights and chandeliers and this man is standing on this stage in front of, you know, a thousand odd people really, and presenting this PowerPoint slides with, you know, pictures of dark storm clouds.

[Paolo Arduino]

Society cannot be stable if really half of the population of the world, billions and billions of people, don't have access to what maybe many of us in this room are used to.

[Crypto Industry Analyst]

But how we can, you know, basically talking about the shackles of the current financial system and the political decline and geopolitical dangers that the world is seeing and basically how his company is going to thrive through that.

[Todd Gillespie]

Todd is a reporter on the finance team at Bloomberg. He normally covers large investment banks, including Goldman Sachs. The guy on stage that was Paolo Arduino, the CEO of Tether, a cryptocurrency linked to the value of the US dollar. Arduino told the crowd in that ballroom that he's building Tether not just to survive Armageddon, but to thrive in Armageddon

[Crypto Industry Analyst]

when many other companies will fail, when countries might fail, when we might see migration crises, when we might. Yeah, exactly. He sees Tether as this sort of life raft.

[Todd Gillespie]

In just over a decade, Tether has grown from an idea into a global crypto juggernaut. It has faced some major hurdles along the way. But under President Trump's crypto friendly administration and with investors looking for alternatives to traditional financial systems, Tether could now be seeing some of its fastest growth yet.

[Crypto Industry Analyst]

It is one of the most increasingly powerful companies in the world that you've probably never heard of.

[Todd Gillespie]

I'm Stacey Vanek Smith in for Sarah Holder and David Gura and this is the big take from Bloomberg News. Today on the show Tether, one of the world's most powerful and most secretive companies. We unpack how its business model of issuing dollar linked stablecoin is turning it into a deals machine and whether scrutiny over its political connections could complicate its meteoric rise. I am a little bit embarrassed to

[Stacey Vanek Smith]

say I had not heard of Tether, but it is a huge company. Will you describe Tether a little bit? What is it and what does it do?

[Crypto Industry Analyst]

Yeah, of course, Daisy. And you're not alone in thinking, in not knowing what Tether is.

[Stacey Vanek Smith]

It makes me feel better.

[Todd Gillespie]

Essentially Tether offers a kind of cryptocurrency, a stablecoin.

[Crypto Industry Analyst]

Its main product is this thing called usdt, which is a token that essentially mirrors the value of the US dollar.

[Stacey Vanek Smith]

It's pegged.

[Crypto Industry Analyst]

It's pegged. Yeah, exactly. It's tethered. Right. That's the whole point.

[Todd Gillespie]

Got it.

[Crypto Industry Analyst]

Smart.

[Todd Gillespie]

Todd says the Tether origin story goes something like this.

[Crypto Industry Analyst]

About like 15 odd years ago, some very smart people had this idea of having this token that was pegged to the US dollar but operated outside of the traditional financial system. This comes from the same portion of the sort of crypto world that is somewhat libertarian. It's somewhat anti the control that central banks have over the monetary system, anti fiat currency, anti fiat currency, anti inflation, essentially anti the ability of the federal government and central banks to devalue a currency and essentially devalue what a Lot of normal people and common people, you know, get affected by. And they're basically saying you should have some kind of fixed money supply that is outside of the traditional financial system that allows the free flow of money and takes some power out of the hands of central banks.

[Todd Gillespie]

By tethering the value of USDT to the US dollar, the idea is that the value of their stablecoin will remain stable. One USDT is supposed to always equal $1. Its value doesn't rise and fall like Bitcoin and other cryptocurrencies. And because it's on the blockchain, you can send Tether to anyone else with a crypto wallet instantly online without having to involve a bank. Todd says both those qualities, the stability and the transferability make it really appealing for people in emerging markets.

[Crypto Industry Analyst]

When you buy a Tether coin or you essentially go to Tether's website and you, you buy a, a Tether, a usdt, you give it a usdt, you give it a dollar, you give the company a dollar plus a small fee, you get a Tether in return, which enables you to send things, enables you to remit payments. For instance. One of the main use cases that Tether has is for people, for instance, who might live in the US who want to send money home to their family and don't want a Western Union or a traditional bank to take a huge cut of that. Tether allows you to do that with minimal fees, essentially. So it basically is a much more efficient way of doing that, of processing payments. And fundamentally like that' it says, makes it so popular.

[Todd Gillespie]

But those same reasons, the stable value, the ability to store it and send it without involving banks, have also made USDT a popular way for people to conduct illicit transactions. And that is something Tether says it has tried to clamp down on.

[Crypto Industry Analyst]

Tether says that partly because it's on a blockchain, it allows you to trace these transactions. So once you can identify whose wallets are sort of on the other side, who these users are, who the sender is, who the receiver is, it allows you to freeze that actually better than you would from instance with cash, right? Like if it's better to at least have something on a blockchain where you can isolate it, you can trace it, you can trace it. Versus like having, you know, some drug cartel go over borders with, with bags and bags of cash.

[Todd Gillespie]

In a statement, Tether said it quote, takes fraud, consumer harm and the misuse of USDT extremely seriously and maintains a zero tolerance policy toward illicit activity, end quote. The company added it works with law enforcement agencies worldwide and and has frozen about $4 billion worth of USDT tokens at the behest of authorities. But a central question around Tether is its reserves. For every dollar's worth of usdt, the company needs to hold a dollar in some kind of stable, relatively liquid asset to back it up. If not, the whole currency could collapse. But it is really hard for anyone outside the company to know exactly how much money Tether holds or how that money is invested.

[Crypto Industry Analyst]

Tether has never had a proper audit, which has led to a lot of skepticism over the strength of its reserves.

[Todd Gillespie]

Tether has announced it's aiming to undergo a full audit by the end of 2026. But for many years, that uncertainty gave U.S. regulators pause. In February of 2021, the New York Attorney General's office found that Tether misrepresented its reserve holdings and banned the company from doing business in New York. Later that year, the Commodity Futures Trading Commission filled found that between 2016 and 2018, Tether only had enough fiat reserves to back up its USDT tokens about a quarter of the time and fined the company $41 million. But when the second Trump administration began, the political winds shifted for Tether.

[Crypto Industry Analyst]

In the Trump administration, you have a Commerce Secretary, Howard Lutnick, who was formerly the CEO of Counter Fitzgerald, which is Tether's longtime banker. You have him in the cabinet.

[Stacey Vanek Smith]

His family owns some of the company,

[Todd Gillespie]

from what I understand.

[Crypto Industry Analyst]

Indeed, yeah. So essentially, through the company, Howard Latinx children own a convertible bond that represents about a possible 5% stake in Tether, which had a valuation of $500 billion. Potential valuation of that large. That's obviously a lot of money.

[Stacey Vanek Smith]

That's like private island money.

[Crypto Industry Analyst]

It's private island money.

[Todd Gillespie]

Last October, Commerce Secretary Letnick sold his multibillion dollar ownership interest in Cantor Fitzgerald, the financial services company he led for more decades to trusts benefiting his four children. At about the same time, one of those trusts took the unusual step of borrowing an undisclosed sum from Tether. A spokesman for Cantor Fitzgerald and the Lutnick children declined to discuss the size of the loan or whether it was used to finance any part of the asset sale. And in response to questions about Lutnick's divestiture and Tether's loan, a White House spokesperson said, quote, the only special interest guiding the Trump administration's decision making is the best interest of the American people. During the same period of time, US Lawmakers also fast tracked legislation to encourage the adoption of stablecoins.

[Crypto Industry Analyst]

We've seen the Genius act being passed through Congress, which essentially creates a regulatory framework for stablecoins. So not just Tether, but also Circle, which is its biggest rival but is a smaller company, are basically now given guardrails to issue tokens that are compliant with US Government regulations, which put them under greater obligations in terms of compliance and also mandate them to back their currencies, back their tokens with reserves of U.S. treasuries, which the government wants because essentially, the more buyers you have for US Treasuries, it allows you to lower the cost of your debt. Right. Increase in demand helps you lower the price for the government. Right. So it increases the cost of debt.

[Stacey Vanek Smith]

This is like how the government gets

[Todd Gillespie]

a lot of its money.

[Stacey Vanek Smith]

These are little loans.

[Crypto Industry Analyst]

Exactly. So on a purely commercial level, for Scott Besant or the U.S. treasury, you know, it's a great deal.

[Todd Gillespie]

In late 2025, Tether CEO posted on X that his company held about $135 billion worth of U.S. treasuries, which he said made it the 17th largest holder of U.S. debt in the world and the only entity in the top 20 that was not a country. Treasury Secretary Scott Besant has lauded the stablecoin industry purchasing all of that debt, a move he says will lower US Borrowing and cement the dollar status as the world's reserve currency.

[Crypto Industry Analyst]

They don't really care all that much about, you know, what Tether might be doing with its profits that it gets from interests on its reserves, but it's

[Stacey Vanek Smith]

counting on that demand. I mean, $100 billion worth of treasuries, if that demand goes away, that's a big deal for our entire economy, potentially.

[Crypto Industry Analyst]

Yeah. That's a concern that has been raised at meetings, you know, among finance chiefs of major economies. We've reported that, you know, last year at the imf, there were discussions about the potential for stablecoins to become a much larger part of buying government debt around the world. And that's. That is a potentially, if not worrying thing. It's a thing that people have to think carefully about. Right. Because if there's a run on a stablecoin, if these companies aren't set up properly, if there are compliance failures, or, you know, if you simply can't trust the folks who are running them, that leaves your whole economy open to potentially a lot of. A lot of danger on a financial level.

[Todd Gillespie]

So what's the company doing with all that money? And how is it positioning itself to move into the US Market? That's next.

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[Todd Gillespie]

Tether has traditionally invested most of its $193 billion worth of assets in US Treasur. That model has led to a lot of profit. Last year, with only 300 people on staff, Tether reported a profit of $10 billion. And now Bloomberg's Todd Gillespie says Tether is looking to grow even bigger.

[Crypto Industry Analyst]

It is now trying to raise money at a 500 billion plus dollar valuation, which would cement it really for the first time as one of the most valuable private companies in the world. When it started its fundraising process that we broke the story of late last about on par with what SpaceX was raising money at. So it gives you an idea of the kind of ballparks that we're talking about. SpaceX OpenAI tether.

[Todd Gillespie]

With so much capital, Tether is poised to become a big player wherever it chooses to invest its reserves. And it's not just US debt.

[Crypto Industry Analyst]

They have been buying land in South America. They've been supporting commodity trading companies. They've been buying up gold, huge, huge quantities.

[Todd Gillespie]

By the way, last year Tether bought 70 tons of gold. That is more than the reported purchases of almost any central bank.

[Stacey Vanek Smith]

It's interesting that a crypto company is investing so heavily in gold and US Treasuries. I mean, those are sort of the two traditional safe havens from volatility. And crypto is not a place to go to avoid volatility generally.

[Crypto Industry Analyst]

And it's interesting to think about how they're hedging that. I mean, it seems like a huge hedge because they are, they are, they are investing heavily in very, very safe assets. But they also see Bitcoin as increasingly a safe asset. Their argument is that, you know, as you see other stores of value become less and less predictable, the demand for Bitcoin will go up, you know, as a safe haven asset as well. So from their mind, that's what they're doing. They are future proofing the company, but also showing a way to have a future proofed economy.

[Todd Gillespie]

Buying gold and US Treasuries is one thing. Governments, companies and individuals all over the world can do that. But Tether is looking to expand its operations to America. Before the passage of the Genius act In July of 2025, stablecoins were in

[Stacey Vanek Smith]

a sort of legal limbo in the

[Todd Gillespie]

US which limited their popularity and growth in this country. But back in August Tether announced a new hire to help change that.

[Crypto Industry Analyst]

One of the key people involved in this is a guy called Bo Hynes, who, by the way, is just 30 years old, but he was one of the key crypto advisors in the Trump administration and left recently and is now CEO of Tether's US Operations.

[Todd Gillespie]

And in January, just a few months after Heinz joined Tether, the company launched a new stablecoin, the usat.

[Crypto Industry Analyst]

So the main Tether token is usdt, but USAT is essentially a token that is compliant with the Genius act, compliant with US Government regulations.

[Stacey Vanek Smith]

So it's a special coin Tether's issuing just for the US Market.

[Crypto Industry Analyst]

Right. They're essentially interchangeable. But this one complies specifically with the restrictions of the US Government government's new regulations.

[Todd Gillespie]

Like usdt, the USAT token is pegged to the US Dollar. What makes USAT different is that US Regulations restrict where Tether can keep the reserves. USAT is exclusively backed by assets like US Treasuries. Tether also cannot place USAT reserves into precious metals like gold or into Bitcoin. And the company's pitch for US Consumers is different too. Since people in the US Already have access to dollars, having a dollar linked stablecoin doesn't really have the same appeal. It's not the same safe haven from inflation as it is in other parts of the world. In the US Todd says the company is looking to push Tether as a better way to process payments.

[Crypto Industry Analyst]

What they're enabling people to do here, for instance, what they think will be an appealing characteristic for companies and individuals here, is that you can avoid things like credit card fees if you're a restaurant.

[Stacey Vanek Smith]

I might pay for my dinner at a restaurant with USAT.

[Crypto Industry Analyst]

Yeah, you can avoid a 3% credit card fee, for instance. He might give you a discount in the same way that if you pay in cash, they might do. Yeah. And also the transaction would be settled immediately because it's done on the blockchain, which is essentially instantaneous.

[Todd Gillespie]

To bolster that effort, Tether has invested in a wide network of online companies that cater to US Consumers. Todd says the strategy in part is to use those platforms to help push Americans into using usat.

[Crypto Industry Analyst]

So Tether has invested in Rumble, for instance, which is a sort of right wing free speech video platform arrival to YouTube, where they already have a big base of millions of users who use that all the time. A lot of the events at the conference in San Salvador were streamed onto Rumble, so they're looking to grow. And Paolo in our interview told me that they are looking increasingly for digital platforms in the US to invest into and that allows them to increase their use case, increase their relevance essentially to the US Economy.

[Todd Gillespie]

Tether has also used its fortunes to make inroads into Washington. An entity that identified itself as Tether America signed on as a donor to Trump's White House Ballroom project. The New York Times has reported that Tether is also expected to back a new political spending group ahead of the midterm elections this year, which it could do through its new US Arm.

[Stacey Vanek Smith]

So after having done a deep dive into this company and followed this company and its sort of recent inroads into the U.S. economy and political system, what is your takeaway here? Is there sort of a systemic danger that Tether poses or how do you feel after having reported out all of this?

[Crypto Industry Analyst]

I think I'll answer your question with two points. I think the first one is that we've seen stablecoin adoption actually plateau a bit recently in the past year or

[Stacey Vanek Smith]

two, yeah, crypto has not had a good right couple months.

[Crypto Industry Analyst]

Crypto as a whole. Yeah, the crypto as an industry certainly has, hasn't had a whole, whole great couple of months. And that will obviously like hit faith in the sector and hit faith in stablecoins as a proxy as well to some degree. There's no doubt about that. My takeaway is I, you know, I don't think Tether is going to become the most mainstream currency in the US or payment token in the US Anytime super soon. But there is a growing use case that I think they will work out somehow a way to expand in the US and increase adoption some ways, whether that's through digital platforms or elsewhere. But the other thing that really interests me is really what they're going to do with their profits. And they've invested, as we've said, in Rumble, but they've also invested in dozens of other companies. I mean their investment portfolio across the world is about 130 different companies that they've invested their profits in in. And what are they really going to do with all that money is a huge question.

[Todd Gillespie]

This is the Big Take from Bloomberg News. I'm Stacey Vanek Smith in for Sarah Holder and David Gura. To get more from the Big Take and unlimited access to all of bloomberg.com, subscribe [e-mail] podcastoffer if you liked this episode, make sure to follow. And remember, review the Big Take wherever you listen to podcasts. It helps people find the show. And thank you for listening. We'll be back tomorrow.

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