Tether, the issuer of the widely-used USDT stablecoin, has marked a significant step into the commodities market, backing a $45 million crude oil transaction. Completed in October 2024, this deal involved the transport of 670,000 barrels of Middle Eastern crude oil and reflects Tether’s push to expand into traditional industries, especially trading and finance.
A Milestone Transaction Using USDT
The transaction, announced on November 8, was executed in partnership with a publicly traded oil company and a commodity trader. Notably, Tether’s USDT stablecoin was used for the entire deal, showcasing its application in large-scale transactions. This venture was led by Tether’s Trade Finance division, focused on integrating blockchain technology with traditional trade finance, aiming to streamline payments in sectors that often depend on slower and more expensive methods.
In October, Tether had hinted at plans to provide financial support to commodities trading companies, offering an alternative to conventional bank financing. The global trade finance industry, valued at an estimated $10 trillion, represents an attractive opportunity for Tether to bring blockchain-based efficiency to traditional commerce.
CEO’s Vision for Expanding Financial Solutions
Tether’s CEO Paolo Ardoino shared the company’s vision, stating, “With USDT, we’re bringing efficiency and speed to markets that have traditionally relied on slower, costly payment structures.” He emphasized that this transaction is just the beginning, as Tether aims to support more industries and commodities, fostering a more inclusive and innovative global financial ecosystem.
Profits and Diversification Supporting Growth
Tether’s move into commodities comes amid record earnings, with the company posting a $2.5 billion profit in the third quarter of 2024, contributing to a total of $7.7 billion in profits for the year. As of September 30, Tether’s assets totaled $134.4 billion, including $102.5 billion in U.S. Treasury bills and 7,100 Bitcoin, valued at over $530 million, underscoring its robust asset base.
The company has diversified its portfolio with investments in high-growth sectors such as renewable energy, Bitcoin mining, artificial intelligence, telecommunications, and education, aligning with Tether’s strategy to go beyond financial services and support the broader digital economy.
Future Prospects for Tether in Commodities
Tether’s entry into oil trading highlights its ambition to bridge blockchain and industrial finance, potentially transforming global trade. Whether Tether will succeed in navigating the complexities of this highly regulated industry remains to be seen, but with its substantial financial backing and forward-looking investments, the company is well-positioned to bring innovation to the global commodity and finance markets. This crude oil transaction may only be the beginning of Tether’s impact on the sector.
