Tether, the cryptocurrency company behind the largest stablecoin USDT, is exploring opportunities to lend in commodity trading.
Financing Opportunities in Tether (USDT) and Commodity Trading
According to reports, Tether, the company that operates USDT, is considering lending to commodity trading companies.
In reality, the largest stablecoin issuers need a way to distribute billions of dollars in profits. If the choice falls to trading in commodities, companies could benefit from broader credit.
At this time, this issue does not appear to be official. In fact, Tether CEO Paolo Ardoino reportedly stressed to Bloomberg that the company is exploring opportunities in this space and is still in the “early stages.”
“We probably won’t reveal how much we intend to invest in commodity trading. We are still developing our strategy.”
What is known, however, is that there is interest and Tether has spoken to several commodity trading companies about this opportunity.
Meanwhile, as of this writing, USDT’s market capitalization is $119.7 billion, one step away from its next target of $120 billion.
Tether and loans for commodity trading: “Stablecoin reserves will not be affected”
Digging a little deeper into the issue, Ardoino told The Block:
“Tether is exploring various trading opportunities in commodities and TradeFi. This business will be conducted through a separate Tether investment vehicle and will not impact stablecoin reserves.”
This means that even though Tether needs to deploy billions of dollars in profits, they will not come from stablecoin reserves.
In fact, Ardoino emphasized that if he were to evaluate financing opportunities in commodity trading, it would be through Tether investments.
Either way, Tether continues to expand through investment. In fact, last month Tether made its first $100 million investment in the agriculture and food sector. This includes the purchase of a 9.8% stake in Latin American giant Adecoa Agro.
Shortly after, Tether invested $1.5 million in Sorted Wallet to make the cryptocurrency sector more accessible in Africa and South Asia, aiming for financial inclusion.
10 years of USDT and its questionable MiCA compliance
Just last week, on October 6th, USDT celebrated its 10th anniversary.
While there is a sense of celebration, there are also concerns that major stablecoins may not be compliant with MiCA, the European Union’s cryptocurrency regulation.
In fact, from June to December of this year, crypto companies have time to comply with the new MiCA rules, but it appears that stablecoins may face difficulties.
In fact, MiCA only recognizes as true fiat-backed stablecoins those issued by entities that are officially and legally recognized as issuers of electronic money, i.e. digital fiat currencies.
As of today, the cryptocurrency company Tether is not yet recognized as an electronic money issuer by the EU.
In this regard, Ardoino announced that he is working on a solution that will be completed in November, just one month before the fateful December 30th. In fact, if MiCA decides not to confirm Tether’s compliance, USDT could be delisted from all exchanges for users residing in EU countries.
