Tether Diversifies Portfolio, Boosts Juventus Stake to 10%

Tether, the stablecoin giant, has recently made significant moves to diversify its portfolio beyond its flagship USDT stablecoin. In April, the company announced two major initiatives: partnering with bitfinex, SoftBank, and Cantor Fitzgerald to launch Twenty One Capital, a Bitcoin-focused public company, and increasing its ownership stake in Italian football club Juventus to over 10%. These steps are part of Tether's broader strategy to mitigate regulatory risks and ensure its resilience in the face of potential market disruptions.

Tether launched USDT in 2014, which quickly became one of the largest stablecoins by market capitalization. USDT plays a crucial role in the cryptocurrency ecosystem, serving as a USD substitute for trading and cross-border payments. It is backed by U.S. Treasury bills, with Tether holding a significant portion of these securities. Last year, Tether purchased $33.1 billion worth of U.S. Treasury securities, making it one of the largest foreign net buyers of these securities.

Tether's operations have expanded globally, with the company initially registered in the British Islands and later moving its headquarters to El Salvador. USDT remains a viable payment instrument in regions with low debit card penetration and for sanctioned jurisdictions. In Africa, USDT is used for savings and remittances, while countries like Russia and Iran use it for foreign trade to evade sanctions. However, Tether's stablecoin faces legal challenges, including the removal of USDT from major exchanges in the European Union due to non-compliance with the Markets in Crypto Assets law. Additionally, emerging regulations in the U.S. may lead to a ban on USDT, prompting Tether to consider launching a new stablecoin that aligns with regulatory requirements.

Ask Aime: What impact will Tether's diversification into Bitcoin and Juventus ownership have on the stability of their stablecoin USD?

Tether has also faced legal scrutiny, with U.S. investigators alleging involvement in money laundering and sanctions violations. CEO Paolo Ardoino has denied these accusations, stating that Tether works closely with law enforcement to prevent misuse of USDT. Despite these challenges, Tether's diversification strategy may help cushion the impact of losing key markets. The company has interests in Bitcoin mining, artificial intelligence, and various other ventures, including investments in blackrock Neurotech, rumble, and Fizen. Tether's CEO, Paolo Ardoino, has emphasized the importance of resilience and decentralization, stating that the company's motto is "build for the apocalypse."