Tether Wants to Lend Its Profits After Beating BlackRock’s Earnings

Key Takeaways

• Tether is exploring lending opportunities with commodities trading firms
• The stablecoin issuer reported more profits than BlackRock.
• Tether’s entry into the commodities market could unlock a new revenue stream for the crypto industry.

Tether, the world’s leading stablecoin issuer, has produced one of the most remarkable performances in the financial sector this year.

With just a handful of employees, the stablecoin company generated $5.2 billion in profits in the first half of 2024, outpacing Wall Street giants like BlackRock.

Now, Tether is looking to put its newfound wealth to work and is eyeing lending deals with commodities trading firms.

Tether Sets Sights on Commodities Market

Tether is reportedly in talks with multiple commodities trading firms to provide U.S. dollar lending opportunities.

The stablecoin issuer aims to deploy its crypto profits in the credit-hungry sector, which has long relied on traditional banks for stimulus.

Tether’s CEO, Paolo Ardoino, confirmed with Bloomberg but declined to disclose further details about the company’s investment plans in the commodities market.

“We are interested in exploring different commodity trading possibilities,” he said, adding that he believed opportunities here would be “massive in the future.”

According to people familiar with the matter, Tether is also exploring using its USDT stablecoin in the traditional commodities market.

A Game-Changer

If successful, Tether’s entry into the commodities lending market could unlock a lucrative new revenue stream for the crypto industry.

The commodities sector, which relies heavily on credit lines to facilitate its operations, has long been dominated by traditional banking giants.

However, the market turmoil, fueled by global unrest and sanctions , has created an opportunity for Tether to disrupt the status quo.

Smaller commodities traders, who often struggle to secure credit lines, could be the biggest beneficiaries of Tether’s entry into the market.

With its stablecoin, USDT, Tether could provide an alternative to traditional banking channels, potentially leveling the playing field for smaller players.

Tether already has some experience in the commodities market. Earlier this year, two prominent Russian metals manufacturers used USDT to pay for cross-border transactions, and Venezuela’s state-owned oil company, PDVSA, accepted USDT payments for oil shipments.

Tether’s Profits Fuel Ambitions Beyond Crypto

Tether has reported massive financial profits since the start of 2023, riding the wave of the crypto market’s resurgence.

The firm reported $12.72 billion in net profit since Q4 2022, compared to BlackRock’s $9.83 billion.

However, the company’s lack of transparency , particularly its reluctance to conduct third-party audits, has cast a shadow over its financial success.

The stablecoin issuer’s profits are linked to the crypto market’s sentiment and the price of Bitcoin , which backs 4% of its reserves.

During bull markets, demand for USDT surges as traders seek to capitalize on the upward trend. Conversely, during bear markets, traders tend to hold back, leading to a decline in demand.

Despite the controversy around its reserves, Tether’s USDT remains a crucial onboarding and liquidity tool.

Now, the firm aims to diversify its profits into traditional markets, potentially paving the way for large crypto-institutional players to enter the commodities market and beyond, pending regulatory clearance.