Meet Tether: The Most Powerful Crypto Firm You’ve Never Heard Of

0:00If you follow markets, you know the value of long-term thinking. You plan, you diversify, you prepare for volatility. But even the best strategies can't prevent every bad day. For more than 75 years, Cincinnati Insurance has helped individuals and businesses navigate tough moments with expertise, personal attention, and independent agents who focus on relationships, not transactions. The Cincinnati insurance companies. Let them make your bad day better. Find an agent at c-i-n-f-i-n dot com. So there's a lot of noise about AI, but time's too tight for more promises. So let's talk about results.

0:40At IBM, we work with our employees to integrate technology right into the systems they need. Now, a global workforce of 300 ,000 can use AI to fill their HR questions, resolving 94 % of common questions. not noise proof of how we can help companies get smarter by putting ai where it actually pays off deep in the work that moves the business let's create smarter business ibm you need to make a huge presentation in an hour adobe acrobat uses ai to take all your documents and generate a presentation with a single click build slides quickly and streamline the process need a last pitch deck? Do that with Acrobat.

1:21Need to level up your presentation design? Do that with Acrobat. You have 30 plus documents that need to be simplified into a proposal. Do that. Do that. Do that with Acrobat. Learn more at adobe.com slash do that with Acrobat. Bloomberg Audio Studios. Podcasts. Radio. News. 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. 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.

2:18I 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. Society cannot be stable if really half of the population, what, billions and billions of people. don't have access to what maybe many of us in this room are used to. 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.

3:02Todd 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 U.S. dollar. Arduino told the crowd in that ballroom that he's building Tether not just to survive Armageddon, but to thrive in Armageddon. When many other companies will fail, when countries might fail, when we might see migration crises. Kind of a life raft. Yeah, exactly. He sees Tether as this sort of life raft. In just over a decade, Tether has grown from an idea into a global crypto juggernaut.

3:40It 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. It is one of the most increasingly powerful companies in the world that you've really never heard of.

4:04I'm Stacey Benick-Smith, in for Sarah Holder and David Gurra, 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.

4:33I am a little bit embarrassed to 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? Yeah, of course, Stacey. And you're not alone in thinking, you know, in not really knowing what Tether is. It makes you feel better. Essentially, Tether offers a kind of cryptocurrency, a stablecoin. Its main product is this thing called USDT, which is a token that essentially mirrors the value of the U.S. dollar. It's pegged. It's pegged. Yeah, exactly. It's tethered. Right. That's the whole point. Yes. Got it. Smart. Todd says the tether origin story goes something like this.

5:12About like 15 odd years ago, some very smart people had this idea of having this token that was pegged to the U.S. dollar, but operated outside of the traditional financial system. You know, 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, you know, inflation, essentially, anti the ability of the federal government and central banks to, you know, devalue a currency and essentially devalue what a lot of normal people and common people, you know, get affected by.

5:49And 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. By tethering the value of USDT to the U.S. dollar, the idea is that the value of their stablecoin will remain stable. One USDT is supposed to always equal one dollar. 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.

6:29Todd says both those qualities, the stability and the transferability, make it really appealing for people in emerging markets. When you buy a Tether coin or you essentially go to Tether's website and you buy 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.

7:04Tether 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's what it says makes it so popular. 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. 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 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, for instance, with cash, right?

7:47Like it's better to at least have something on a blockchain where you can isolate it. You can trace it. You can trace it. A little bit. Versus like having, you know, some drug cartel go over borders with bags and bags of cash. 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 has frozen about four billion dollars worth of USDT tokens at the behest of authorities. But a central question around Tether is its reserves.

8:26For 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. Tether has never had a proper audit, which has led to a lot of skepticism over the strength of its reserves. 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.

9:13Later that year, the Commodity Futures Trading Commission 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. In the Trump administration, you have a commerce secretary, Howard Lutnick, who was formerly the CEO of Cantor Fitzgerald, which is Tether's longtime banker. You have him in the cabinet. His family owns some of the company, from what I understand. Yes, indeed. Yeah. So essentially, through the company, Howard Lutnick's children own a conversable bond that represents about a possible 5 % stake in Tether, which had a valuation of$500 billion, potential valuation of that large.

10:02That's obviously a lot of money. That's like private island money. It's private island money. Last October, Commerce Secretary Lutnick sold his multibillion-dollar ownership interest in Cantor Fitzgerald, the financial services company he led for more than three 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.

10:50During the same period of time, U.S. lawmakers also fast-tracked legislation to encourage the adoption of stablecoins. 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 US 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.

11:34debt, right? Increase in demand helps you lower the price for the government, right? So it increases the cost of borrowing. This is like how the government gets a lot of its money. These are little loans, basically. Exactly. So on a purely commercial level for Scott Besant or the U.S. Treasury, you know, it's a great deal. In late 2025, Tether's 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 U.S.

12:14borrowing costs and cement the dollar status as the world's reserve currency. 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 reserve. But it's 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, 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 stable coins to become a much larger part of buying government debt around the world.

12:51And 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 danger on a financial level. 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.

13:31Hello, gorgeous. It's Lala Kent, host of Untraditionally Lala. My days of filling up cups at Sur may be over, but I'm still loving life in the valley. Life on the other side of the hill is giving grown-up vibes, but over here on my podcast, Untraditionally Lala, I'm still that Lala you either love or love to hate. I've been full-on oversharing with fans, family, and former frenemies like Tom Schwartz. I had a little bone to pick with Schwartzy when he came on the pod. You don't feel bad that you told me I was a bootleg housewife? I almost flipped a pizza in your lap. I was so pissed. Oh my God, I literally forgot about that until just now.

14:04Sorry, I don't want to blame alcohol. I got to blame that one on the alcohol. This is about laughing and learning when life just keeps on lifing. Because I make mistakes so that you guys don't have to. We're growing, we're thriving, and yes, sometimes we're barely surviving. But we do it all with love. It's unruly, it's unafraid, it's untraditionally la-la. Listen to Untraditionally La-la on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.

15:00I'm Anna Navarro and on my new podcast, Bleep with Anna Navarro, I'm talking to the people closest to the biggest issues happening in your community and around the world. Because I know deep down inside right now, we are all cursing and asking what the bleep is going on. I'm talking to people like Julie K. Brown, who broke the explosive story on Jeffrey Epstein in 2018. These victims have been let down time and time again for decades and decades and decades by local law enforcement, by federal law enforcement, by administration after administration. The Justice Department, through I think we counted four presidential administrations, failed these victims.

15:44Listen to Bleep with Ana Navarro as part of the My Cultura podcast network. Available on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.

16:04Tether has traditionally invested most of its$193 billion worth of assets in U.S. treasuries. 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. It is now trying to raise money at a$500 billion-plus 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 year, that was about on par with what SpaceX was raising money at.

16:46So it gives you an idea of the kind of ballparks that we're talking about. SpaceX, OpenAI, Tether. With so much capital, Tether is poised to become a big player wherever it chooses to invest its reserves. And it's not just U.S. debt. They have been buying land in South America. They've been supporting commodity trading companies. They've been buying up gold at huge, huge quantities, by the way. Last year, Tether bought 70 tons of gold. That is more than the reported purchases of almost any central bank. It's interesting that a crypto company is investing so heavily in gold and U.S. treasuries.

17:20I mean, those are sort of the two traditional safe havens from volatility. And crypto is not a place to go to avoid volatility generally. And it's interesting to think about how they're hedging that. I mean, it seems like a huge hedge because 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.

18:04Buying gold and U.S. treasuries is one thing. Governments, companies and individuals all over the world can do that. But Tether is also looking to expand its operations to America. Before the passage of the Genius Act in July of 2025, stablecoins were in a sort of legal limbo in the U.S., which limited their popularity and growth in this country. But back in August, Tether announced a new hire to help change that. One of the key people involved in this is a guy called Bo Hines, 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 U.S.

18:42operations. And in January, just a few months after Hines joined Tether, the company launched a new stablecoin, the USAT. So the main tether token is USDT, but USAT is essentially a token that is compliant with the Genius Act, compliant with U.S. government regulations. So it's a special coin tether is issuing just for the U.S. market? Right. They're essentially interchangeable, but this one complies specifically with the restrictions of the U.S. government's new regulations. Like USDT, the USAT token is pegged to the U.S. dollar. What makes USAT different is that U.S. regulations restrict where Tether can keep the reserves.

19:26USAT is exclusively backed by assets like U.S. Treasuries. Tether also cannot place USAT reserves into precious metals like gold or into Bitcoin. And the company's pitch for U.S. consumers is different, too. Since people in the U.S. 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 U.S., Todd says, the company is looking to push Tether as a better way to process payments. 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.

20:10Like I could pay for my dinner at a restaurant with USAT. Yeah, you can avoid a 3 % credit card fee, for instance. They might give you a discount in the same way that if you pay in cash, they might do. And also the transaction would be settled immediately because it's done on the blockchain, which is essentially instantaneous. To bolster that effort, Tether has invested in a wide network of online companies that cater to U.S. consumers. Todd says the strategy, in part, is to use those platforms to help push Americans into using USAT. So Tether has invested in Rumble, for instance, which is a sort of right wing free speech video platform, a rival to YouTube, where they already have a big base of millions of users who use that all the time.

20:57A lot of the events at the conference in San Salvador were streamed on to Rumble. So they're looking to grow. And Paolo, in our interview, told me that they are looking increasingly for digital platforms in the U.S. to invest into. And that allows them to increase their use case, increase their relevance, essentially, to the U.S. economy. 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 U.S.

21:36arm. 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? 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 two. Yeah, crypto has not had a good couple months. Crypto as a whole, yeah. The crypto as an industry certainly hasn't had a whole great couple of months.

22:13and that will obviously like hit faith in the sector and hit faith in stable coins as a proxy as well to some degree. There's no doubt about that. My takeaway is I don't think Tether's 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.

22:52I mean, their investment portfolio across the world is about 130 different companies that they've invested their profits in. And what are they really going to do with all that money is a huge question.

23:07This is The Big Take from Bloomberg News. I'm Stacey Vanek-Smith, in for Sarah Holder and David Gurra. To get more from The Big Take and unlimited access to all of Bloomberg.com, subscribe today at Bloomberg.com slash podcast offer. If you liked this episode, make sure to follow and 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.

23:36Hi, I'm Iris Palmer, host of the Against All Odds podcast. Every week, I'm sitting down with exceptional people who have broken barriers, even when the odds were stacked against them. Like chef Victor Villa of Villa's Tacos. You know the taquero from the Bad Bunny halftime show? It was great. It was a big moment. It was special. And I felt like I was really representing my family, you know, my brand, my city. I was representing all taqueros, not only of like, you know, the U.S., but of Mexico and beyond. All the taqueros of the world. Listen to Against All Odds on the iHeartRadio app, Apple Podcasts, or wherever you get your podcast.

24:12Hey there, folks. Amy Robach and TJ Holmes here. And we know there is a lot of news coming at you these days from the war with Iran to the ongoing Epstein fallout, government shutdowns, high-profile trials, and what the hell is that Blake Lively thing about anyway? We are on it every day, all day. Follow us, Amy and TJ, for news updates throughout the day. Listen to Amy and TJ on the iHeartRadio app, Apple Podcasts, or wherever you listen to podcasts.

25:03around the world. I'm talking to people like Julie K. Brown, who broke the explosive story on Jeffrey Epstein in 2018. The Justice Department, through we counted four presidential administrations, failed these victims. Listen to Bleep with Anna Navarro on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.