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Tether Takes on Banks by Expanding $1.5B Stablecoin-Backed Commodity Loans

Tether Takes on Banks by Expanding $1.5B Stablecoin-Backed Commodity Loans

Bitget-RWA2025/11/15 03:34
By:Bitget-RWA

- Tether accelerates commodity trade finance expansion with $1.5B in USDT/dollar loans to oil, wheat, and cotton traders. - The move leverages $200B+ reserves and stablecoin efficiency to challenge traditional banks in emerging markets. - Tether aims to scale lending to $3-5B by 2026, targeting liquidity gaps left by banks exiting risky commodity markets. - Gold-backed operations and HSBC hires highlight its hybrid model blending digital assets with traditional commodities.

The stablecoin powerhouse

Holdings SA is ramping up its involvement in commodity trade financing, having already extended $1.5 billion in loans to businesses dealing in oil, cotton, wheat, and other agricultural products, . This initiative signals a calculated move into a field historically controlled by banks, utilizing Tether’s substantial reserves and its US dollar-linked stablecoin, , to deliver quicker and more adaptable funding options.

Tether’s entry into trade finance is a component of its wider diversification plan, with the company launching a specialized Trade Finance division that operates independently from the assets supporting its stablecoins.

Tether Takes on Banks by Expanding $1.5B Stablecoin-Backed Commodity Loans image 0
By providing loans in both US dollars and USDT, Tether seeks to benefit from the rising use of stablecoins in developing economies, where in USDT’s role in international payments. With nearly $200 billion in reserves—comprising US Treasury securities and gold—the company is well-positioned to challenge conventional financial institutions.

This expansion comes as traditional banks retreat from commodity lending, pressured by tighter regulations and notable defaults. Smaller trading firms, often unable to secure large-scale credit, now face even greater liquidity challenges. Tether’s approach, which can approve financing within minutes instead of weeks, fills this void by offering short-term credit tailored to the fast pace of commodity trading. “We’re gearing up for significant growth,” Ardoino remarked, highlighting the team’s “strong confidence” in the project.

This development could have major consequences for established banks. By streamlining the lending process, Tether may capture a larger share of the market, especially in higher-risk regions where banks are hesitant to lend. This evolution reflects broader shifts in decentralized finance (DeFi), where blockchain-driven platforms are transforming traditional financial services.

Tether’s strategy also incorporates its expanding gold reserves, now exceeding $8.7 billion, into its trade finance operations. The company recently brought on board two senior precious metals traders from HSBC to enhance its gold business, demonstrating its intent to connect traditional commodities with digital assets. Its gold-backed token, Tether Gold (XAUT), has reached a market capitalization of $1.56 billion, further establishing its presence in the blended finance landscape.

Despite the efficiency of this model, obstacles persist. Some market participants may be reluctant to borrow in USDT due to concerns over price fluctuations or regulatory issues, though Tether’s scale and reserve stability may help alleviate these worries. Furthermore, the absence of audited financial disclosures for Tether’s activities has attracted attention, and regulators are expected to keep a close watch as the company grows.

Looking forward, Tether intends to boost its commodity lending portfolio to between $3 and $5 billion by 2026, with Ardoino forecasting $15 billion in annual earnings for 2025 from interest on its reserves. Expanding into trade finance not only broadens Tether’s income sources but also supports its ambition to become a “private, dollar-based central bank for the crypto sector,” as described in internal plans.

As Tether adapts to regulatory changes and market shifts, its progress in this space could transform global trade finance, offering a preview of a world where stablecoins and digital assets are central to facilitating real-world commerce.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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