Stablecoin issuer Tether Holdings Ltd is reportedly considering venturing into commodity trade financing amid a growing cash pile.
According to a Bloomberg reportTether Holdings, which generated $5.2 billion in net profit in the first half of 2024, is exploring the possibility of lending to commodity trading companies.
Citing “people familiar with the matter,” the report says Tether has initiated discussions with several commodity trading firms with the intention of offering U.S. dollar loans to the sector.
Tether CEO Paolo Ardoino tells Bloomberg that he believes the opportunities in the commodity trading sector will be “huge in the future.”
“We are probably not going to disclose how much we plan to invest in commodity trading. We are still determining the strategy. We are interested in exploring different commodity trading opportunities.”
Bloomberg’s anonymous sources say Tether has also been talking to commodity trading companies about ways to use its flagship stablecoin, USDT, to facilitate their operations.
While the big commodity trading companies have easy access to credit, smaller players are disadvantaged in this area, according to Bloomberg. The report adds that Tether could potentially be an attractive source of credit for commodity trading companies because its financing may not be subject to the same regulatory hurdles as traditional banks.
USDT currently has a market cap of over $119 billion, while its closest competitor, Circle’s USDC, has a market cap of just under $35 billion.
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