Tether Shakes Up Finance: $1.5B Commodities Lending Push Signals Crypto Giant’s Next Power Move

Tether—the stablecoin behemoth that prints money faster than central banks—just dropped a bombshell. Its latest play? Turning $1.5 billion into a wrecking ball for traditional commodities lending.

From stablecoins to steel beams
Forget USDT arbitrage. The company's diving into physical asset financing, leveraging its war chest to undercut legacy lenders. One anonymous insider quipped, 'Wall Street still uses fax machines for collateral calls—we're bringing this market kicking and screaming into DeFi.'

Why this matters
While banks drown in compliance paperwork, Tether's moving at blockchain speed. That $1.5 billion? Chump change compared to its reserves, but enough to make commodity traders sweat. Just don't ask about audit details—some mysteries are better left unsolved.

The playbook's clear: flood a sector with cheap capital, dominate pricing, repeat. After all, if you can't beat the system... buy the commodities backing it.

New trade finance unit operates separately

The commodities lending work is handled by Tether’s Trade Finance division, which started last year. This operation runs separately from the reserves that support its stablecoins. Last October, news emerged that Tether had begun talking with companies in the sector about lending opportunities.

Tether is entering this market several years after regular banks started backing away from commodities lending. A string of company failures and fraud cases spooked many lenders. While major trading houses like Trafigura and Cargill can still get plenty of credit, smaller firms struggle to find funds, which limits how much business they can do.

This has created room for private lenders to step in, especially for deals in riskier places where banks don’t want to operate. These lenders usually charge interest rates above 10% to make up for taking on more risk.

For Tether and other private lenders, commodities lending has an appealing feature: credit lines get used over and over again quickly, so interest payments come in fast and steady. A typical international shipment of wheat or oil takes less than a month from start to finish.

Stablecoin boom fuels diversification push

Tether’s push into different areas, including lending, artificial intelligence and sports, is happening as stablecoins become more popular worldwide. These digital tokens, usually tied to regular currencies like the dollar, are being used more for money transfers and payments. US legislation passed in July that covers stablecoins has helped speed up this trend.

USDT dominates the stablecoin market with almost $184 billion currently in use. Since Tether must keep reserves of liquid assets like US Treasury bills to back every coin, it earns billions each year in interest. As reported by Cryptopolitan last month, Ardoino said he thinks the company will make about $15 billion in profit for 2025. The company doesn’t have its financial reports audited.

Tether has been building up its commodities business beyond just lending. The company now holds one of the biggest stockpiles of Gold in the world outside of banks and governments. This week, reports came out that Tether is hiring two top precious metals traders from HSBC Holdings Plc.

The company’s gold-backed stablecoin is currently worth almost $2.2 billion, according to CoinGecko data.

In March, Tether announced it WOULD pay up to $616 million to increase its ownership in Adecoagro SA, a South American company that handles farming and energy production, to 70%. In April, Adecoagro brought Kyril Louis-Dreyfus, who comes from a well-known commodities trading family, onto its board.

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