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Tether, the largest stablecoin issuer, could consider lending U.S. dollars to commodities trading institutions, per reports.
Tether (USDT) has its sights set on strengthening its position in traditional financial markets by offering loans to companies, according to Bloomberg, citing anonymous sources with knowledge on the matter. Tether CEO Paolo Ardoino reportedly stated that the firm’s investment arm conducted early-stage conversations focused on traditional finance lending possibilities.
Ardoino emphasized that Tether Investment would explore such opportunities separately from the USDT stablecoin business. This isn’t the first time Tether has offered lending facilities. Between 2019 and 2021, the company disbursed $11.6 billion in collateralized loans, with most deals collateralized in Bitcoin (BTC) and some in Ethereum (ETH).
Tether Investment previously shared plans to increase capital deployment as the digital payment provider seeks new avenues to park its massive profits.
The firm’s first-half net profits for 2024 reached $5.2 billion, setting a new record. In June, Ardoino disclosed that Tether would invest over $1 billion across sectors in the next 12 months. In addition to investing in Bitcoin and crypto mining operations, Tether has backed Blackrock Neurotech with $200 million, supported decentralized artificial intelligence data centers, and injected $1.5 million into a wallet provider targeting emerging markets.
Tether’s thrust into traditional finance comes as regions pivot to standardize crypto and stablecoin regulations. Rumors about USDT’s future in Europe have circulated as the European Union’s Markets in Crypto-Assets Regulation came into force. Ardoino himself asserted that MiCA could jeopardize stablecoins in Europe.
In the U.S., policymakers are moving toward comprehensive stablecoin laws that could allow banks to issue fiat-pegged tokens. A new crop of players, like Ripple, have also announced stablecoin plans, potentially challenging USDT’s market dominance.