Tether Explores Billions in Loans to Commodity Traders to Displace Traditional Trade Finance
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As smaller companies struggle to access traditional financing, Tether's commodity trading looks at lending. USDT is facilitating cross-border trade for Russian and Venezuelan exporters, highlighting the growing role of the stablecoin.
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According to a Bloomberg report, Tether Holdings, the world's largest issuer of the stablecoin USDT, is exploring lending to commodity trading companies.
The crypto foundation has held discussions with several commodity trading firms about US dollar loan opportunities, according to people familiar with the matter.
Commodity traders, especially smaller firms, rely on lines of credit to ship oil, metals and food around the world, but getting cash is becoming increasingly challenging.
While major players in the commodity trading industry have access to extensive credit networks, smaller companies often have difficulty accessing financing. Tether's proposal offers an alternative that can streamline payments and transactions by removing the strict regulatory conditions of traditional financial institutions.
In an interview with Bloomberg News, Tether CEO Paolo Arduino confirmed the company's interest in commodity trading financing, but emphasized that discussions are preliminary.
“We are interested in exploring different commodity trading options,” Arduino said, adding that the opportunities in the sector could be huge in the future.
While Arduino declined to say how much the company plans to invest in commodity trading, Tether indicated that it is being cautious about its strategy.
“We will not disclose how much we intend to invest in commodity trading. We are still defining the strategy,” Arduino said.
Tether's USDT has already been used by major Russian steel producers and Venezuela's state oil company PDVSA in cross-border transactions, according to reports. Stablecoin's role in facilitating international trade, especially in restricted markets, allows for an alternative financial infrastructure to support the production sector.
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