The US Treasury Department has publicly expressed concern about the activities of Tether, the issuer of the USDT stablecoin. To eliminate the growing influence of the issuer on the financial market, it is necessary to replace the stablecoin with a central bank digital currency, the department believes.

The ministry announced that the stablecoin issuer USDT buys too many government bonds. According to the department, the total capitalization of all Tether stablecoins is $166 billion. $120 billion of this volume is secured by the company’s investments in US Treasury bonds.

“The collapse of a major stablecoin such as the Tether token could lead to a massive sell-off in Treasuries. Although stablecoin issuers currently represent a small portion of the Treasury market, a rise in this share over time could expose the market to increased risk of a massive sell-off due to panic among stablecoin holders,” the officials explained the concerns.

The department believes that the practice of the 1800s, when “private, wild” American currencies were forcibly replaced by the state national currency, should be applied to Tether coins.

Key role in replacing stablecoins USDT and similar assets can be taken over by the central bank, the Federal Reserve. The Federal Reserve has the formal authority to issue a digital dollar (CBDC), noted in the Ministry of Finance.

Earlier, Tether CEO Paolo Ardoino said that the US authorities could destroy the company at any time if they wanted. But, according to him, the issuer of the USDT stablecoin will not come into conflict with the government.