Tether is exploring the possibility of expanding its lending model to commodity trading companies, a sector traditionally reliant on bank credit. According to a Bloomberg report, the company could use its substantial profits to issue US dollar loans, reshaping how credit-hungry firms in the commodities market fund their operations.
The discussions between Tether and commodity traders also addressed the potential use of USDT in mainstream commodity transactions. USDT is already popular among traders and producers in countries like Venezuela and Russia, where US sanctions complicate dollar-based trades. Tether now aims to broaden this use to larger markets. In the commodities sector, companies frequently rely on credit lines to fund large shipments of oil, metals, and food. Tether’s lending model, free from the regulatory constraints that govern traditional banks, could speed up the payment process for these trades, making it an attractive option for commodity trading firms.
“Tether sees huge future potential in commodity trade finance,” said Paolo Ardoino, Tether’s chief executive officer, in an interview with Bloomberg. While Ardoino did not provide specific details, he confirmed that the company is in the early stages of exploring this new direction.
Smaller traders, in particular, could find Tether’s lending model appealing as private credit continues to make its way into commodity trade finance. Despite Tether’s reluctance to release audited financial results, the company reported $5.2 billion in profits for the first half of 2024. This financial strength positions Tether to potentially play a significant role in the commodity trade finance space, providing an alternative to traditional banking credit and accelerating transactions for traders worldwide.
Source: Tether Lending Model Now Planned to Expand to Commodity Trading Firms