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Tether, the company behind the world’s largest stablecoin USDT, is exploring ventures in commodities trading and traditional finance (TradFi), signaling its ambition to expand beyond the crypto sector. CEO Paolo Ardoino confirmed that Tether is in the early stages of exploring these opportunities, noting that this new business line will be separate from its stablecoin operations and will not impact Tether’s capital reserves.
Tether’s involvement in commodity trading could offer much-needed alternatives for smaller firms in the sector, which often face challenges in securing traditional financing. According to a Bloomberg report, Tether has held discussions with various companies about potential U.S. dollar lending opportunities, offering a quicker and less-regulated funding option than what is currently available from conventional financial institutions.
Despite the preliminary nature of these discussions, Ardoino believes the opportunities in commodity trade finance could be “massive” in the future. He emphasized that Tether's ventures in this space will be conducted through a separate investment arm, ensuring it remains distinct from Tether’s stablecoin business, which recently posted a record net profit of $5.2 billion in the first half of 2024.
This isn’t Tether’s first foray into non-crypto investments. Earlier this year, the company invested $200 million in Blackrock Neurotech, a biotech firm focused on helping individuals with paralysis and neurological disorders. Tether’s push into the commodities sector could further enhance its role in facilitating international trade, especially for markets like Russia and Venezuela, where USDT is already being used to support cross-border transactions in oil and metals.
As smaller commodity traders face increasing difficulty accessing traditional credit lines, Tether’s potential entry into this market could disrupt the industry by streamlining payments and trades, offering a flexible financial infrastructure where traditional options fall short.