Tether Allocates $1 Billion for Emerging Markets Investments

• Stablecoin giant Tether has earmarked a significant amount for investment opportunities.
• Tether is diversifying its portfolio beyond stablecoins and crypto assets.
• The USDT stablecoin issuer has made several major investments in the past years.

Over the past months, stablecoin issuer Tether has been on an investment streak, diversifying its portfolio with forays into promising sectors beyond the crypto scope. Despite having made several notable commitments, the industry giant does not appear to be slowing down as it eyes even more opportunities.

Tether’s Billion-Dollar Vision

On Tuesday, June 11, 2024, Bloomberg reported that the investment arm of the USDT stablecoin issuer, Tether Holdings, has set aside a whopping $1 billion for additional ventures in the coming years.

The report stated that Tether’s CEO, Paolo Ardonio, shared the ambitions in an interview, as part of the firm’s plans to progress its focus on alternative financial infrastructure for emerging markets such as artificial intelligence and biotech.

“It’s all about investing in technology that helps with disintermediation with traditional finance. Less reliance on the big tech companies like Google, Amazon, and Microsoft,” he stated in the Bloomberg interview.

The prospective $1 billion commitment will also broaden its already major investment in these areas, following its allocation of nearly $2 billion over the past two years.

To ensure the smooth redemption of its stablecoin USDT amid these major investment plans, Tether will keep 100% of its reserves, alongside an additional 6% cushion taken out of its profits. Ardonio stated that another percentage of its remaining profits will go into these deals, as well as in infrastructure in emerging markets to promote the growth of its distribution network.

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Tether’s bold plans come less than a week after it made a significant investment in a Taiwan-based regulated blockchain-enabled financial institution.

Tether’s XREX Investment

On June 5, 2024, Tether announced an $18.75 million investment in XREX , which aims to drive innovation and financial inclusion in emerging markets. This includes facilitating USDT cross-border B2B payments and inflation-hedged stablecoins, as well as the rollout of regulatory tech to combat the illicit use of stablecoins.

CEO Ardonio described the strategic move as part of Tether’s broader effort to extend its influence across various sectors by harnessing the potential of blockchain and digital assets, aligning with its vision to build infrastructure beyond the crypto market.

Tether has also reportedly allocated over $1 billion to investments in artificial intelligence, exemplified by its support for data-center operator Northern Data Group.

On the Flipside

• Tether’s stablecoin, USDT, has a current market capitalization of $112.4 billion.
• USDT has come under intense scrutiny in recent months for use by malicious actors.
• In April 2024, Tether unveiled a formal organizational structure comprising four divisions: Data, Finance, Power, and Education.

Why This Matters

Tether’s $1 billion investment allocation highlights its commitment to exploring markets beyond the stablecoin sector and expand its reach, marking a shift in its operational strategy.

Discover more about the ongoing regulatory pressure against Tether:
Here’s Why Tether Is Getting Heat from U.S. over Russian Use  

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