Tether Targets Commodity Lending—A New Era for USDT?
Tether Holdings Ltd continues to roll out ambitious plans to broaden its influence. As a major player in the crypto market and the leading stablecoin issuer, the company is now shifting its focus towards traditional financial markets.
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Tether Holdings Ltd continues to roll out ambitious plans to broaden its influence. As a major player in the crypto market and the leading stablecoin issuer, the company is now shifting its focus towards traditional financial markets.
In particular, Tether is considering lending to commodity trading companies. This move could potentially reshape the landscape of an industry that has traditionally relied on bank financing.
Tether’s CEO, without saying too much, hinted at the potential for change:
Why Is Tether Moving into Commodities?
The commodity market has a high demand for external capital. Companies dealing in oil, metals, and other goods constantly need substantial working capital to buy, store, and transport their products.
Tether sees a huge investment opportunity in this sector.
Expanding into traditional markets is part of Tether's strategy to diversify its risks. By investing in different sectors, the company can reduce its exposure to regulatory pressures in the crypto space and secure a more stable business model.
Read more: Uruguay Becomes Tether's Destination for Eco-Friendly BTC Mining
A key advantage is that digital assets currently face fewer regulatory hurdles than traditional banks, potentially making Tether’s lending terms more attractive to these companies.
Tether Holdings claims to have the capital necessary to become a major player in this space.
In its last financial statement released in July 2024, Tether reported profits of $5.2 billion for the first half of the year.
What Does This Mean for the Market?
Tether’s entry into commodity lending could increase competition among lenders, likely driving down loan costs for companies.
Additionally, it could spur further technological advancements in trade finance.
Although Paolo Ardoino had previously stated that Tether aimed to remove secured loans from its reserves, it appears the company has now adjusted its strategy.
Related: Paolo Ardoino: “Winning Is a Marathon, It’s Not a Sprint”
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