Tether Explores Lending Opportunities in Commodity Trading Sector

Tether, known for issuing the prominent stablecoin USDT, is reportedly negotiating with commodity trading firms to potentially lend billions in profits.

The company is exploring U.S. dollar lending opportunities with various entities in the commodities sector, which has a high demand for credit. Sources familiar with the discussions revealed that Tether is also assessing how its stablecoin can be integrated into conventional commodities trading. USDT has been utilized by traders and producers in countries like Venezuela and Russia to navigate U.S. sanctions.

Credit lines are essential for commodity trading operations, helping companies finance significant shipments of oil, metals, and food globally. While large players like Trafigura maintain extensive credit networks—reportedly having $77 billion in credit lines—smaller firms often face difficulties in securing adequate funding.

Tether’s lending proposition is attractive due to its lack of stringent regulatory requirements compared to traditional banks, allowing for faster transactions and settlements. This could be particularly advantageous for smaller and mid-sized trading companies.

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As private credit increasingly enters the commodities trade finance space, Tether aims to establish itself as a significant investor. Although the firm has not disclosed audited financial results, it reported a profit of $5.2 billion for the first half of 2024 in its latest filing.

In a recent Bloomberg interview, Tether CEO Paolo Ardoino confirmed the company’s interest in commodity finance, noting that the strategy is still being developed. He emphasized the potential for large opportunities in this sector as they continue to explore various trading avenues.

Alexander Stefanov