TL;DR
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Tether alone now owns more US government debt than major countries like Germany, the UAE, and Australia — and they’re not only profiting from it, but driving blockchain adoption in the process.
Full Story
You know those boring businesses you hear about every now and then that absolutely print money?
E.g. Hunt Brothers Pizza — the gas station pizza business that makes $540M a year.
Yeah, well — stablecoins are kinda like that.
The leading stablecoin, Tether, just reported its earnings and have reeled in $5.2 billion of profit so far this year.
(How? By taking a small percentage of the money invested into their coin, and re-investing it to eek out a profit — big bank energy).
Here’s why this is important, and likely to grow:
The US government generates cash by selling IOU’s (typically to other countries) with set interest rates — and to these other countries, it’s a solid deal, cause the US is seen in the same light as the Lannisters (from Game of Thrones):
They always pay their debts.
Problem is…
There’s only so much US debt that other nation states can/are willing to buy — and the US is forever hungry for fresh cash.
Stablecoins are the perfect instrument for extending demand for US debt — they increase the reach of the US dollar by allowing users anywhere/everywhere to buy US dollars, instead of their (often less reliable) local currencies.
And this ain’t some hairbrained theory!
It’s already happening in real-time. Tether alone now owns more US government debt than major countries like Germany, the United Arab Emirates, and Australia.
(Quickly driving blockchain adoption in the process).
We love to see it.
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