Tether, the prominent stablecoin issuer, has announced its foray into commodities financing, funding its first crude oil transaction in the Middle East. The October transaction facilitated the shipment of 670,000 barrels of crude oil, valued at approximately $45 million, between a major publicly traded oil company and a leading commodity trader. While Tether declined further comment, this move signals a significant expansion beyond its core cryptocurrency business.
“This transaction marks the beginning, as we look to support a broader range of commodities and industries, fostering greater inclusivity and innovation in global finance,” stated Tether CEO Paolo Ardoino. This initiative positions Tether as a potential lender in the commodities trading sector, diversifying its portfolio beyond digital assets.
Known for its USDT stablecoin, pegged to the US dollar, Tether has become a key player in the cryptocurrency market. The company boasts over $105 billion in cash and cash equivalents backing its USDT token. While audited results are not publicly available, Tether reported a consolidated profit of $7.7 billion in the first nine months of this year.
This oil trade follows reports last month of Tether engaging in discussions with various companies within the credit-hungry commodities trading sector. This strategic move allows Tether to leverage its substantial reserves and explore new revenue streams. Tether’s profit model primarily involves earning interest from the US Treasuries and other short-term equivalents held as reserves for its stablecoin.
