On November 8, Tether, the issuer of the USDT stablecoin, announced its first crude oil transaction in the Middle East. This move marks Tether’s expansion beyond digital assets, aiming to establish a presence in commodities trading.
Tether’s Strategic Entry into Oil Trade
In October 2024, Tether’s investment branch completed a deal involving the shipment of 670,000 barrels of crude oil. The transaction was facilitated between a well-known publicly traded oil producer and a top commodity trader. This step highlights Tether’s growing role in global trade finance.
Modernizing Trade Finance with Tether’s Vision
Tether’s Trade Finance division, launched in 2024, aims to innovate within the $10 trillion trade finance sector. With this initiative, Tether provides alternative funding options for commodity traders, especially those who typically rely on banks. Its approach seeks to improve efficiency in global trade finance.
Separate from Stablecoin Reserves, Based on High Profitability
Unlike Tether’s stablecoin reserves, the Trade Finance division operates on profitability. Tether’s recent financial disclosures underscore this, revealing the company’s high performance. Moreover, Tether is expanding into other sectors, such as artificial intelligence, renewable energy, and education.
CEO Paolo Ardoino on Tether’s Future Plans
CEO Paolo Ardoino emphasized Tether’s commitment to exploring new markets. “This transaction is only the beginning,” he noted. “We aim to support a broader range of commodities and industries, enhancing global finance with greater speed and inclusivity.”
Encouraging USDT for International Trade
Tether’s Trade Finance division actively promotes USDT as a faster, cost-effective payment method compared to traditional systems. Reports indicate Tether is exploring USDT as an alternative to the U.S. dollar in regions facing sanctions, such as Venezuela and Russia.
Expanding Tether’s Reach to New Sectors
This transaction shows Tether’s intent to go beyond stablecoins and enter industries like financial services, technology, and agriculture.
Is Tether Becoming a Financial Powerhouse?
Tether’s Q3 2024 earnings report highlights strong financial growth, with $2.5 billion in quarterly profit, bringing annual earnings to $7.7 billion. By September, Tether’s assets totaled $134.4 billion, largely in U.S. Treasury bills and Bitcoin, with additional investments in gold.
A Decade of Growth Amid Regulatory Challenges
Celebrating its 10th year, Tether’s market influence has surged, partly due to increased regulatory scrutiny since the FTX collapse. Tether has also strengthened cooperation with U.S. authorities, onboarding the FBI in 2023 to ensure transparency and compliance.
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