Stablecoin issuer Tether is reportedly considering a move into traditional finance. One of the ways it plans to do that is by potentially lending billions of dollars of its profits to commodity traders.
According to a Monday report from Bloomberg, Tether has been meeting with several commodity trading firms to discuss U.S. dollar lending opportunities. One of Tether’s big selling points was using USDT for more mainstream commodity trades.
A stablecoin pegged to the value of the U.S. dollar could be a big advantage to commodity traders looking to avoid unnecessary volatility, especially when trading in countries that are subject to U.S. sanctions.
Tether CEO Paolo Ardoino confirmed the news to Bloomberg, saying that the company was still in the “early stages” of exploring opportunities in commodities.
“We likely are not going to disclose how much we intend to invest in commodity trading. We are still defining the strategy,” said Ardoino.
In a comment on X, he reiterated that the talks with commodity traders were “exploratory” and noted that these activities would be done “outside of tether stablecoin’s reserves, via a separate vehicle.”
Tether’s substantial cash reserves and liquidity position it among the top entities holding significant amounts of cash or equivalents. Tether reported an eye-watering $5.2 billion in profit for the first half of the year, and revealed holding $97.6 billion in U.S. Treasuries.
Besides cash and Treasuries, Tether has investments in precious metals, corporate bonds, and various other assets aimed at generating returns while maintaining liquidity. The firm also has a $6.56 billion venture portfolio that invests in firms aligned with its mission.
