Tether mulls lending billions to TradFi firms

According to reports, Tether, the largest stablecoin issuer, may consider lending US dollars to commodity trading institutions.

According to Bloomberg, based on anonymous sources with knowledge of the subject, Tether (USDT) aims to strengthen its position in traditional financial markets by offering loans to companies. Tether CEO Paolo Ardoino reportedly stated that the firm’s investment arm is conducting early-stage talks focusing on traditional financing loan facilities.

Ardoino emphasized that Tether Investment will explore such opportunities separately from its USDT stablecoin business. This isn’t the first time Tether has offered lending facilities. Between 2019 and 2021, the company originated $11.6 billion in secured loans, with most deals collateralized by Bitcoin (BTC) and some by Ethereum (ETH).

Tether Investment has previously shared plans to increase capital deployment as the digital payments provider looks for new ways to park its massive profits.

The company’s first half net profit of 2024 reached 5.2 billion dollars, breaking a new record. In June, Ardoino announced that Tether would invest over $1 billion in industries over the next 12 months. In addition to investing in Bitcoin and crypto mining operations, Tether backed Blackrock Neurotech with $200 million, backed decentralized AI data centers, and injected $1.5 million into a wallet provider targeting emerging markets.

Tether’s move into traditional finance comes as regions look to standardize crypto and stablecoin regulations. With the entry into force of the European Union’s Crypto Asset Markets Regulation, rumors about the future of USDT in Europe began to circulate. Ardoino claimed that MiCA could endanger stablecoins in Europe.

In the US, policymakers are moving towards comprehensive stablecoin laws that could allow banks to issue tokens pegged to fiat money. A new group of players, such as Ripple, have also announced plans for stablecoins that could challenge USDT’s market dominance.