What Happens to Tether if Japan Dumps US Treasuries? Depeg Risks Explained
Rising Japanese yields may prompt Japan to sell US Treasuries, potentially pressuring Tether's USDT reserves and raising depeg concerns.Summary
Market anxiety is growing as analysts suggest Japan, the largest foreign holder of US government debt, might start selling its Treasury holdings due to surging domestic bond yields making US debt less attractive. A significant sell-off could impact the crypto sector, specifically Tether (USDT), whose reserves are heavily concentrated in US Treasuries—making it the 17th largest holder globally. If Japan reduces its exposure, volatility in the Treasury market could indirectly pressure Tether, leading to potential depeg risks, as suggested by some market watchers who foresee a chain reaction impacting Bitcoin. This concern is compounded by S&P Global Ratings downgrading Tether's peg maintenance assessment due to riskier asset exposure. However, most market participants remain skeptical of a forced depeg, citing Tether's history of maintaining its peg during crises and its substantial profit buffer, alongside the vastness of the US Treasury market to absorb gradual selling pressure.
(Source：BeInCrypto)