Tether To Make Half-Billion Dollar Mining Investment
The world's largest stablecoin issuer is seeking to embed itself further as a fundamental part of the crypto ecosystem.
Tether, the company that issues the widely-used USDT stablecoin, is positioning to become one of the world's foremost Bitcoin miners. The announcement comes at a time when Bitcoin's ESG credentials are back in the spotlight, for most positive reasons than before.
Deep Roots In The Crypto Space
As the largest stablecoin issuer in the world, Tether has deep roots in the crypto space, dating back to 2014. While the reserves that back USDT are cash and cash equivalents, the company has recently stated its commitment to growing its BTC reserves. Tether currently has at least 55,000 BTC on its books, making it the third largest private company holder, after MtGox (200,000 BTC) and Block.one (140,000 BTC).
Read also: Bitfinex Accumulates BTC
To this end, Tether has committed to spending $500 million over the next six months to build its own Bitcoin mining facilities and acquires stakes in other mining firms. In an interview with Bloomberg, CEO Paulo Ardoino stated that Tether would establish mining operations in Uruguay, Paraguay, and El Salvador. The ultimate aim is to increase the company's share of total network hashrate to 1%.
A Crypto Powerhouse
With over 87 billion USDT in existence, Tether earns significant income from a huge pile of short-duration bonds used to back the token. At the end of Q3, the company had over $73 billion in US T-bills, and a cash pile of over $3 billion.
Tether has come in for considerable criticism in the past, due to its opaque accounting practices and concerns that USDT might not be fully backed, as well as for the overlap between the management of leading exchange Bitfinex and the stablecoin issuer. However, its fortunes have turned over the last few months.
Recently, Tether and Bitfinex had a major lawsuit against them dropped. The class action, which accused the companies of misrepresenting the nature of USDT and its backing, was filed two years ago. Chief Judge Laura Taylor Swain of the US District Court for the Southern District of New York dismissed the suit, and the plaintiff has dropped their appeal.
These events show that Tether is succeeding in professionalizing its operation, putting behind it some of the mistakes of the past, and seeking to embed itself further as a key player in the crypto ecosystem.
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