Stablecoin Giant Tether Enters Oil Trade by Financing $45M Middle Eastern Crude Deal

As a seasoned analyst with over two decades of experience in global finance and technology, I find Tether’s foray into the trade finance industry intriguing. Having observed the evolution of digital currencies from their nascent stages to becoming a significant player in the financial landscape, it is fascinating to see USDT, the third-largh cryptocurrency, expanding its horizons.

According to Tether, their investment sector facilitated a $45 million deal for crude oil between a significant oil corporation and a commodities trader. This move is one of the efforts by the company behind the popular stablecoin USDT to broaden its horizons beyond its strong foundation in stablecoin operations.

The company behind USDT, the third-largest digital currency, aims to establish a unique position within the $10 trillion global trade finance sector. This sector is vital for supporting international trade and commerce by minimizing risks related to cross-border transactions. Last month, Tether unveiled its intentions to enter commodities trade finance, and it’s also broadening its horizons into venture capital, cryptocurrency mining (specifically Bitcoin or BTC), and artificial intelligence.

In October, a transaction was made that included approximately 670,000 barrels of crude oil from the Middle East. This transaction occurred between a well-known, publicly traded major oil company and a leading commodity trading firm, as reported by Tether.

According to Tether CEO Paolo Ardoino, this transaction signifies the start of an expansion as they aim to assist a wider variety of commodities and industries. In simple terms, USDT (Tether) is being used to introduce efficiency and swiftness to markets that have traditionally utilized slower and more expensive payment systems.

Tether’s USDT digital currency plays a crucial part in cryptocurrency trading by providing liquidity on exchanges, and it’s also expanding into a payment and savings tool in developing countries. It’s a highly profitable venture: The company reported earning $7.7 billion in profits this year alone, primarily from the interest earned on its holdings of approximately $80 billion in U.S. Treasury bills. Tether has employed these earnings to broaden its business beyond stablecoin production, venturing into startup investments, Bitcoin mining, energy production, and artificial intelligence.

A Wall Street Journal report last month alleged Tether is under U.S. criminal investigation for possible violations of sanctions and anti-money-laundering laws, something the company denied. Ardoino said in an interview with CoinDesk that the company respects American sanctions and is dedicated to remaining a large buyer of U.S. debt.