According to a recent Bloomberg report, Tether, the issuer of the world’s largest stablecoin by market cap, is exploring the idea of lending billions of dollars from its profits to commodity traders, hinting at a possible expansion into traditional finance. The company is reportedly in the early phases of evaluating U.S. dollar lending prospects within the commodities sector.
The company has been in talks with several commodity trading firms, proposing USDT as a viable tool for facilitating more conventional trades. Leveraging a stablecoin like USDT, which is pegged to the U.S. dollar, could help commodity traders mitigate volatility risks, especially in regions affected by U.S. sanctions.
Tether CEO Paolo Ardoino confirmed the talks, stating that they are 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. He clarified on X that any potential investments would be handled outside of Tether’s stablecoin reserves, using a separate entity.
Tether’s robust financial standing bolsters its foray into this new sector. The firm reported a profit of $5.2 billion in the first half of the year and holds $97.6 billion in U.S. Treasuries, in addition to investments in precious metals, corporate bonds, and a $6.56 billion venture portfolio.
Tether’s exploration into commodity trading represents a significant step in its evolution, potentially bridging the gap between crypto and traditional finance.