Tether explores new opportunities in commodities and TradFi while maintaining stablecoin reserves, focusing on separate investment ventures and growth.
Tether CEO Paolo Ardoino recently announced that the company is exploring new opportunities in commodity trading and traditional finance (TradFi). These new business ventures will be managed through a separate Tether investment department. It will ensure no impact on the reserves of its stablecoin, USDT. Ardoino confirmed that the company’s focus would be on commodities. In this regard, Tether has already discussed US dollar lending opportunities with firms in the commodity sector.
In an interview, Ardoino said that Tether is still in the experimental phase of leveraging commodity trading and TradFi. He was keen to point out that these activities would be run separately through the Tether Investment vehicle. This new direction is expected to run independently from its tether’s stablecoin operations, which is vital for the company’s tether reserves.
Tether Explores Commodity Trading, Eyes $1B Investment
Apart from being the world’s largest issuer of a stablecoin with the largest market capitalization, Tether has recently established several subgroups with the investment arm. As far back as June this year, Ardoino announced Tether’s intention to inject over $1 billion in the next year. The company is on the lookout for new forms of business that will help it expand its revenues.
Bloomberg on Monday reported that Tether is exploring business lines, particularly commodities trading. According to industry insiders, Tether has been discussing U.S. dollar lending with different firms involved in the commodities industry. Whether lending or direct investments, Tether appears to be in a good place to make the deployments. This is following Tether’s most current quarter attestation, in which the company reported $5.2 billion in net profit in the first half of 2024.
Tether has also invested in other industries apart from the financial industry, making it strategic in some ways. For example, in April of this year, the company spent $200 million on Blackrock Neurotech, the biotech startup that works to aid people with paralysis and neurological diseases. Ardoino was keen to point out that these are two very distinct businesses, completely unrelated to Tether and its stablecoin. The stablecoin business means keeping large reserves to back USDT. On the other hand, the investment operations are designed to grow the company’s financial reach.
Overall, Tether expansion into TradFi and commodities can be seen as its desire to seek new opportunities and expand its operations. Nevertheless, in order to do so, the company wants its users to know that the new business activities will not compromise the stability and safety of the stablecoin reserves.
