Tether, the company responsible for the world’s largest stablecoin USDT, has announced a new multi-billion dollar initiative. According to reports, Tether is in discussions with commodity trading firms to lend out billions of dollars in profits.
The company has started talks with various companies in the commodities trading sector and is looking into opportunities for U.S. dollar lending. Additionally, Tether is exploring how its stablecoin could be utilized in mainstream commodities trading. The USDT stablecoin has proven to be a valuable tool for traders and producers in countries facing U.S. sanctions, such as Venezuela and Russia.
Credit lines are crucial for commodity trading firms, enabling them to finance significant shipments of oil, metals, and food globally. While larger industry players typically have access to extensive credit networks, smaller firms often struggle to secure the necessary funds to maintain their operations.
Tether’s proposal is appealing because it is not subject to the same strict regulatory requirements as traditional banks, potentially allowing for faster payments and trade settlements. This flexibility could be a game-changer for smaller and mid-sized commodities trading firms, according to experts.
Private credit is increasingly making its way into the commodities trade finance space, and Tether has positioned itself as a significant investor. The company claims to have the capital required for such initiatives, despite not providing audited financial results. In its most recent financial filing, Tether reported $5.2 billion in profit for the first half of 2024.
Tether CEO Paolo Ardoino confirmed the company’s interest in commodity finance, stating that the research is still in its early stages. He mentioned that the company likely won’t disclose the amount they plan to invest in commodity trading and that they are still defining their strategy. Ardoino expressed confidence in the opportunities for commodity trading, stating that they could be very large in the future.
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