Wednesday, June 12, 2024

Tether Plans To Invest More Than $1B In AI, Biotech, Financial Infrastructure

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Tether Holdings, the investment arm of stablecoin issuer USDT , to invest more than $1 billion into deals over the upcoming 12 months.

What Happened: Tether CEO Paolo Ardoino announced that the investment arm of Tether is focusing on alternative financial infrastructure, artificial intelligence and biotechnology. He mentioned that the company has already invested over $1 billion in AI and infrastructure, as reported by Bloomberg.

Tether’s USDT stablecoin, which tracks the dollar, has a market capitalization of around $112.4 billion. The company has been investing its reserves in U.S. Treasury bills and other securities, earning significant profits in the current high interest-rate environment.

Despite regulatory challenges, Tether’s USDT has maintained its value, and the company is now expanding its business beyond stablecoins. It recently split into four divisions and plans to launch a platform for issuing digital-token bonds and equity later this year.

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Also Read: Tether Looks Beyond Stablecoins, Restructures Operations Into Four Divisions

Why It Matters: Tether’s significant investment plans come at a time when the company is diversifying its business model.

Tether’s decision to maintain 100% of its reserves, plus an additional 6% cushion, underscores its commitment to ensuring the stability and reliability of its USDT stablecoin. This approach is particularly crucial in the current high interest-rate environment, where the company has been able to earn substantial profits from its investments in U.S. Treasury bills and other securities.

The company’s expansion into new areas such as digital token bonds and equity issuance reflects its ambition to become a more comprehensive player in the financial ecosystem. This move could potentially open new revenue streams and enhance Tether’s market position.

What’s Next: The influence of Bitcoin as an institutional asset class is expected to be thoroughly explored at Benzinga’s upcoming Future of Digital Assets event on Nov. 19.

Read Next: Why ‘You Should Only Buy Bitcoin’ And All Other Top 20 Cryptos Are ‘Really Jokes,’ According To This Trader

This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Image: Shutterstock

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