- Tether model promotes financial agility.
- USDT could transform commodity trading.
- Tether explores new markets with USDT.
The new lending model proposed by Tether promises to significantly transform access to credit in the commodities sector, which has traditionally been dependent on banking institutions. Second According to a Bloomberg report, the company is considering investing its substantial profits in providing US dollar loans to companies in the funding-hungry sector.
Discussions between Tether and commodity traders have been exploring the potential use of USDT, the company’s digital currency, in commodity trading. USDT has already gained popularity among traders and producers in countries like Venezuela and Russia, where U.S. sanctions make dollar transactions difficult. Now, Tether is looking to expand that applicability to commodities markets on a larger scale.
Commodity traders often rely on credit lines to finance multi-billion-dollar transactions involving oil, metals and food. Tether’s lending model, which escapes strict banking regulations, could significantly speed up payments on such trades, making it an attractive option for these companies.
The private sector has already been making inroads into commodity trade finance, and Tether, despite its reluctance to release audited financial results, claims to have enough capital to influence this market. In its recent financial statement in July, Tether revealed a profit of $5,2 billion for the first half of 2024.
In an interview with Bloomberg, Tether CEO Paolo Ardoino confirmed that his company is in the early stages of exploring opportunities in the commodities market. Ardoino did not specify any investment plans, but highlighted the huge potential he sees for financing commodities trading.