Tether Holdings Ltd, the issuer of the popular stablecoin, is reportedly looking to enter the commodity trade financing space. This comes as their cash reserves continue to grow.
According to a Bloomberg report, Tether made an impressive $5.2 billion in net profits in the first half of 2024. Now, they are exploring the idea of providing loans to companies involved in commodity trading.
Sources familiar with the situation say Tether has started discussions with several trading firms. They aim to offer loans in US dollars to support this sector.
Tether’s CEO, Paolo Ardoino, shared with Bloomberg that he sees a lot of potential in the commodities trading market. He said, “We likely are not going to disclose how much we intend to invest in commodity trading. We are still defining the strategy. We are interested in exploring different commodity trading possibilities.”
The report also mentions that Tether has been talking to trading firms about using its flagship stablecoin, USDT, to help with their operations.
While larger firms in this space can easily access credit, smaller players often struggle. Tether could step in as a valuable source of credit. Their funding might bypass some of the regulatory hurdles that traditional banks face.
As of now, USDT boasts a market cap of over $119 billion. In contrast, its closest competitor, Circle’s USDC, has a market cap of just under $35 billion.