Translated by: Plain Language Blockchain

The most widely used private dollar globally does not primarily operate on a single US chain. It runs on Tron. Of the more than $180 billion USDT issued by Tether,nearly half is deployed on Tron, with a total supply of $89 billion concentrated on this network that has neither a US regulatory connection nor whose founder has been constantly pursued by the US Securities and Exchange Commission (SEC) for three years. Discussions around the reserves behind it have hardly any real substance.

A chain that carries half of the supply

Tron has quietly becomethe "dollar settlement layer" that emerging market users truly interact with. The reason is simple:cheap transfers and deep liquidity, while USDT is the default account unit on the network. Moreover, the scale of these fund flows is substantial. Tronscan shows that USDT on Tronhas a daily scale of approximately $12 billion, exceeding $160 billion in a week,distributed among tens of millions of holding accounts. The 2026 first quarter verification report shows that the company holds a direct and expected amount of $141 billion in US debt. At this scale, Tether is sufficient to hold a globally comparable scaleto that of the US government. Additionally, it holds about $20 billion in gold and $8.2 billion in excess reserve buffer. In other words,the collateral is in the US and is ample; however, the orbit of these dollars does not run in the US.

From a law enforcement perspective, this issue is indeed valid

A large amount of dollar assets on a chain outside of US regulatory supervision itself represents a law enforcement risk— and the defense of Tether's position is not without reason. Tether is not a completely defensive issuer. In April 2026, it resisted the US Office of Foreign Assets Control (OFAC) and US law enforcementand froze $344 million USD in USDT. Tetherstated that to date, in collaboration with multiple countries and hundreds of institutions,it has frozen over $4.4 billion in assets. It operates the T3 Financial Crime Division in conjunction with Tron and TRM Labs and has also independently frozen hundreds of millions in funds. This capability of "freezing and seizing" is real and indeed important. But the question is, this capabilityis fundamentally still at the discretion and control of the issuer: a private company decides whether to take action and determines which addresses should be targeted. This is different from the regulatory and rule-based supervisory framework set for US issuers by the "Genius" bill.Cooperation does not equate to issuance ability.

A founder familiar to Washington

What complicates matters further isthe political figures behind a chain. The SEC sued Justin Sun and Tron in 2023, alleging their involvement in unregistered securities issuance and market manipulation;the two sides reached a settlement in March 2026, one condition being charges against Justin Sun personally, with his associated company paying $10 million. Moreover, Justin Sun also separately purchased a crypto project connected to Trump, World Freedom Finance, which makes his political ties even more awkward when juxtaposed with Tron’s role in illicit finance. Chain analysis found that in 2025stablecoins accounted for approximately 84% of targets for illegal crypto transactions; just from this year's received crypto assets, it exceeded $100 billion.Tron has also been pointed out as one of the main conduits for these fund flows. A chain that carries the circulatory dollars globallyalso carries a significant proportion of "washed dollars" worldwide.

GENIUS cannot manage that offshore stablecoin

The new billtruly cannot achieve its goals, and that is here. The "GENIUS Bill" sets reserves and information disclosure for "licensed US issuers." However,Tether is an offshore institution, and its product USDT is not a "licensed payment stablecoin", and there is no provision in the bill to enforce this, hence the $180 billion flow remains outside of regulated US settlement paths. Tether's response is the launch of a product based in the US:USAT. This product will be issued by Anchorage Digital, custodied by Cantor Fitzgerald, and operated by Bo Hines, who has occupied positions in the White House's crypto council. However, when Tether announced USAT, the offshore version of USDT had a scale exceeding $169 billion. This compliant stablecoin version is a clean and multi-lateral isolated new tool aimed at US institutions; whilethe "dollars" actually used in other parts of the world continue to flow on Tron, almost unaffected by this.The part that the GENIUS Bill regulates is that unclear part of Tether's business; while the part that genuinely constitutes a problem is left outside the system.

Tether actually wants to flatten Tron

In fact, even Tether itself must be willing to let the world's largest private dollar rely long term on a network it does not own. It is creatingits own settlement layer. Supported by Tether's sister company Bitfinex and Peter Thiel's Founders Fund,Plasmalaunched its mainnet Beta version in September 2025, at that time already aggregating $2 billion in stablecoin liquidity, connecting with over 100 DeFi partners, andsupporting zero-fee USDT, with the committed amount for its token sale exceeding $373 million. The goal of this design is clear:to migrate activity settlements from Tron and Ethereum to the infrastructure controllable by Tether itself.But aside from the route's ultimate installation,this migration also takes many years.Liquidity is sticky, users will not actively switch chains purely based on the issuer's words. At least before then, this level of concentration still exists, and corresponding risks remain.

Why this concentration pattern is hard to dismantle

A natural rebuttal is: this matter will ultimately be modified by the market itself. Regulation will become more stringent, and users will migrate to compliant stablecoins on regulated chains, gradually decreasing the concentration on Tron. Butthese changes will not come quickly. Those holding USDT on Tron are not a group of US institutional investors waiting for a US regulatory framework to land. They are more likelysavers and traders from Argentina, Nigeria, Turkey, and various places in Southeast Asia. For these people, atransfer cost of just a few dollars and a few seconds is the best financial product they can access, as they choose Tron,not for its compliance posture; but a "better regulated" US alternative,does not solve the real problems they are currently facing. American issuers like Circle may have won institutional fund flows under the GENIUS framework; but the cake earned truly comes from the running of "street dollars" on Tron, which is a completely different competitive arena —competing on costs and liquidity, domestically packaged in a market lacking US regulation. And in maintaining competition, Tether still holds the ground with product advantages not yet replicated by competitors.

But the demand has never been in Washington.

Discussions about stablecoins in Washington center around reserves and information disclosure; while in reality, the operating structure is:most dollars actually used for trading and circulation by people globally occur on a chain that the US does not regulate or supervise, and can only indirectly inherit when the offshore issuer is willing to cooperate. This is the market structure fact that current reserve rulesfail to convey.

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Source: https://www.forbes.com/sites/digital-assets/2026/06/17/tron-settles-close-to-half-of-all-usdt-and-washington-cannot-reach-it/