Tether Holdings, the creator behind the USDT stablecoin, is aiming to branch out from the cryptocurrency space into traditional finance (TradFi) initiatives. This includes exploring lending opportunities with commodities trading firms, as highlighted in a recent report by Bloomberg News on October 14, featuring insights from CEO Paolo Ardoino.
According to sources close to the situation, Tether is currently engaged in talks to provide US dollars to commodity traders. This sector heavily relies on credit access to facilitate substantial shipments of oil, metals, and agricultural products.
In an interview with Bloomberg, Ardoino confirmed these discussions but refrained from sharing specific details regarding potential investments. He emphasized that these endeavors would not interfere with the company’s primary stablecoin operations.
While large entities like Trafigura Group enjoy extensive lines of credit—amounting to around $77 billion across 150 institutions—smaller traders often struggle to obtain financing. Tether’s unique lending model could attract interest, as its loans may bypass many regulatory hurdles that traditional lenders face, potentially expediting transactions.
Reportedly, the company is strategizing on enhancing USDT’s application in mainstream commodity trading worldwide, leveraging its liquidity and the inherent stability it provides.
New Horizons for Tether
For the first half of 2024, Tether reported impressive profits of $5.2 billion, largely attributed to its investments in traditional assets, including US Treasuries, totaling $97.6 billion. This remarkable exposure to US Treasuries places Tether among the largest holders, surpassing several major countries such as Germany, the UAE, and Australia.
The firm has experienced significant growth, maintaining a leading role in the stablecoin market, with USDT’s market capitalization nearing $120 billion—an all-time high for the stablecoin.
This latest initiative marks Tether’s ongoing efforts to capitalize on its rapid expansion and diversify into innovative sectors.
Over the past several months, Tether has been actively pursuing diversification, beginning with an intensified focus on artificial intelligence (AI), which was announced in March.
Following this, in April, Tether launched four new business divisions dedicated to data, finance, power, and education, reinforcing its commitment to advancing beyond traditional stablecoin operations. Less than two weeks later, Tether made its inaugural investment in neuroscience by acquiring a stake in the notable brain-computer interface company, Blackrock Neurotech.