As traditional banks pull back, Tether rapidly steps in to meet the demand for commodity lending, offering both swift action and significant capacity

The stablecoin powerhouse

Holdings SA is preparing for a significant expansion into commodity lending, having already provided about $1.5 billion in loans to traders dealing in oil, cotton, wheat, and other agricultural goods, according to CEO Paolo Ardoino in a recent Bloomberg interview. This move signals a major shift in Tether’s strategy, as the company utilizes its substantial reserves—nearly $200 billion in assets—to enter the lucrative trade finance sector. Tether is issuing loans in both U.S. dollars and its stablecoin, which maintains a one-to-one peg with the U.S. dollar.

This commodities lending initiative operates under Tether’s Trade Finance division, which was established in 2022, and is kept separate from the reserves backing its stablecoins. Ardoino highlighted that the company’s financial strength, fueled by interest from Treasury bills and other liquid investments, enables it to rival traditional banks in a market where smaller traders often struggle to secure credit. “We’re planning a major expansion,” he stated, adding that the team is “extremely optimistic” about the project’s prospects.

Tether’s move into commodity finance is partly a response to the gap left by conventional lenders. In recent years, banks have reduced their exposure to riskier markets due to stricter regulations and several notable defaults. As a result, smaller commodity traders, who lack access to large institutional credit, are facing tighter liquidity.

provides a quicker and more adaptable solution, with loans being approved within minutes instead of weeks. The use of USDT is also attracting traders in areas where stablecoins are gaining popularity, such as Latin America, where Ardoino noted increasing usage.

This approach is part of Tether’s broader effort to diversify beyond stablecoins. The company now holds one of the world’s largest private gold reserves, with over $12 billion in physical gold as of September 2025.

from HSBC—Vincent Domien, who led global metals trading, and Mathew O'Neill, former regional head of precious metals—to bolster its gold business. These appointments highlight Tether’s goal of connecting traditional commodities with digital assets, as demonstrated by its gold-backed token, Tether Gold (XAUT), which has a market capitalization of $1.56 billion.

Tether’s push into commodity lending also reflects its confidence in the short-term, high-turnover nature of trade finance. Unlike long-term loans, commodity credit is usually repaid within weeks as goods are shipped and sold, allowing for rapid returns. For instance, shipping wheat or oil often takes less than a month, enabling Tether to quickly recover its funds. This model differs from that of traditional banks, which typically require extensive checks and collateral.

Regulatory oversight continues to be a hurdle, as Tether’s financial statements are not audited. Nevertheless, Ardoino anticipates $15 billion in profits for 2025, mainly from interest on its reserves. The company has also faced scrutiny over the transparency of its gold assets, though it asserts that its holdings are fully backed and regularly verified.

Experts in the industry believe Tether’s expansion could reshape the commodity trading sector. By offering attractive rates and utilizing its stablecoin infrastructure, Tether may appeal to traders seeking quicker access to funding. Additionally, the use of USDT in lending could drive greater adoption of the token in developing markets, where dollar liquidity is essential but banking services are limited.

As Tether grows its commodity lending business, it must balance the risks of volatile markets with the need to uphold its reputation for reliability. Success in this area could further establish Tether as a key link between traditional finance and digital assets, reinforcing its leadership in the stablecoin industry.

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with cash, USDt credit