Tether: From stablecoin to financial giant - seventh largest holder of US government bonds and new directions in Bitcoin mining

Tether: From stablecoin to financial giant - seventh largest holder of US government bonds and new directions in Bitcoin mining

Tether: From stablecoin to major financial player

Tether, the issuer of the USDT stablecoin, has undergone a remarkable development in 2024. With a total value of $33.1 billion in US treasuries, Tether became the seventh largest buyer in the sector. This is roughly equivalent to the volume held by countries such as South Korea and Germany. The overtaking of Taiwan and Canada highlights Tether's increasing influence in the international financial landscape, which is notable for a company in the cryptocurrency industry.

Tether's expansion into Bitcoin mining

In addition to significant exposure to US government bonds, Tether has also expanded its business to include Bitcoin mining. Currently, Tether owns 21.4% of Bitdeer, equivalent to 31,891,689 Class A shares. Through this move, Tether aims to establish a long-term infrastructural foundation beyond printing and distributing USDT.

The motivation behind this involvement in the mining sector is clear: to diversify and expand influence in the crypto market. With this approach, Tether not only aims to improve its market position, but also opens up new opportunities for control over the production and distribution of digital assets.

Access to the US dollar for 400 million people

Tether CEO Paolo Ardoino highlights that around 400 million people, especially in low-income countries, now have access to the US dollar thanks to USDT. In addition to acting as a means of payment on crypto exchanges, this stablecoin also provides a much-needed liquidity option in regions where access to hard currencies is limited.

In countries with high inflation or inadequate banking structures, USDT could act as a valuable tool, allowing people to save their dollar value without having to open an account with a foreign bank. This could have far-reaching implications for local monetary policy and further undermine the attractiveness of local currencies.

Legal challenges and their effects

However, Tether's growth faces challenges. The company is embroiled in a complex legal dispute with Swan Bitcoin surrounding a failed mining operation called 2040 Energy. Tether tried to block legal action by Swan, who wanted to take former employees to a court in California. However, the request was rejected because the court considered that the protection of commercial secrets cannot trump the right of access to justice.

These legal complications cast a shadow over Tether's ambitious plans and show that the company's growth comes with many challenges that need to be overcome.

Conclusion

Tether has evolved from a stablecoin provider into a major player in the financial sector by acquiring large holdings of U.S. Treasury bonds and investing in Bitcoin mining. These developments not only demonstrate the company's innovative strength, but also USDT's potential to act as a lifeline in economically disadvantaged regions. At the same time, however, legal disputes cannot be ignored and could affect Tether's future growth.