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 benefiting from it, but driving blockchain adoption in the process.
Full story
You know those boring companies you hear about every now and then that absolutely print money?
E.g Hunt Brothers pizza – the gas station pizza company that makes $540 million a year.
Yeah, well – stable coins are a bit like that.
The leading stablecoin, Tether, just reported its earnings, bringing in $5.2 billion in profits so far this year.
(How? By taking a small percentage of the money invested in their currency and reinvesting it to make a profit – the energy of the big banks).
Here’s why this is important and likely to increase:
The US government generates money by selling IOUs (usually to other countries) with fixed interest rates – and for these other countries it’s a solid deal, because the US is seen in the same light as the Lannisters (from Game of Thrones):
They always pay their debts.
Problem is…
There is only so much US debt that other nation states can/will buy – and the US is always hungry for fresh money.
Stablecoins are the perfect tool to increase demand for US debt – they expand the reach of the US dollar by letting users buy US dollars anywhere, anytime, instead of their (often less reliable) local currency.
And this is not a nonsense 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.
(This will quickly stimulate the adoption of blockchain).
We’d love to see it.