Tether Ventures Into Commodities Trading And Traditional Finance

Tether, the issuer of the world’s largest stablecoin by market cap, is expanding its horizons into traditional finance (TradFi) and commodities trading, according to CEO Paolo Ardoino.

Speaking to The Block, Ardoino confirmed that Tether is in the early stages of exploring opportunities in these sectors. However, he added that these activities would be handled through Tether’s investment arm and would not affect the company’s stablecoin reserves.

“Tether is in early exploration of different commodity trading and TradFi opportunities,” Ardoino said. “This business line won’t have any impact on stablecoins’ reserves, as it will be performed via the Tether Investment vehicle that is separated.”

While Tether is widely known for its role in developing USDT, the stablecoin tied to the U.S. dollar, the company has been branching out, creating distinct divisions, including an investment arm. In June, Ardoino revealed plans for Tether to invest over $1 billion within a 12-month period.

Bloomberg first reported Tether’s exploration into commodities trading, also noting that the company has engaged in discussions about U.S. dollar lending with several firms in the commodities sector. These moves come as Tether seeks to diversify its business, leveraging its capital and record profits. In July, the company reported a record net profit of $5.2 billion for the first half of 2024.

Tether’s ventures into investment are not new. In April, the company invested $200 million in Blackrock Neurotech, a biotech firm focused on helping people with paralysis and neurological disorders. At that time, Ardoino reiterated that these investments are distinct from Tether’s stablecoin operations, which require substantial capital reserves.

Tether also made a noteworthy investment in the South American agricultural firm Adecoagro SA, acquiring shares worth about $102 million.

The transaction, which represents 9.8% of Adecoagro’s total outstanding shares, makes Tether the third-largest shareholder of the company.

Adecoagro, which is listed on the Nasdaq under the ticker AGRO, is Argentina’s leading producer of milk and rice. The company has a market capitalization of just under $1.2 billion, also engages in farming and renewable energy in Brazil, as well as planting crops like soybeans and corn in Argentina and Uruguay.