Tether Holdings, which operates the world’s largest stablecoin USDT, is expanding its horizons by exploring financing opportunities in the commodity trading space. The company is considering US dollar financing as a new way to distribute billions of dollars in profits and is in talks with multiple commodity trading companies, according to a Bloomberg News report by Archie Hunter and Olga Khalif. It is said that they are doing so.
The report went on to say that the commodity trading industry, which revolves around the movement of high-value cargo such as oil, metals and food, relies heavily on lines of credit to sustain operations. While large companies like Trafigura Group have access to a vast network of financiers, smaller trading companies often struggle to secure the credit they need to keep shipping. Tether’s potential involvement in this space could be a lifeline for these companies, as their financing is not subject to the strict conditions imposed on traditional lenders.
According to a Bloomberg report, Tether’s interest in the commodities space is fueled by billions of dollars in profits the company has generated recently. In its latest financial filing, Tether reported first-half 2024 revenue of $5.2 billion. Tether CEO Paolo Ardoino confirmed to Bloomberg that the company is actively exploring opportunities in the commodity space, although the strategy is still in its early stages. step. He added that while Tether has not yet disclosed the investment amount, the company sees great potential in this market.
Bloomberg noted that Tether has great potential to disrupt commodity trade finance. Banks have long dominated this space, lending against liquid collateral such as oil and metals. But several high-profile bankruptcies and scandals in recent years have caused some traditional lenders to step back, creating opportunities for new players like Tether.
Tether’s stablecoin is clearly gaining traction in regions such as Russia and Venezuela, where USDT is being used to settle cross-border transactions under US sanctions, according to Bloomberg. Now, with a team dedicated to developing trade finance opportunities and executive attendance at key industry events such as LME Week, Tether appears positioned to become a major player in global commodity trade finance. .
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