Tether seeks entry into commodity trading finance such as crude oil… Anticipating changes in the industry

[블록미디어 명정선 기자] Tether Holdings Ltd is discussing ways to utilize stablecoins with companies trading commodities such as crude oil and metals. This heralds a major change in an industry that has relied on bank loans.

According to Bloomberg on the 14th (local time), Tether, the world’s largest stablecoin issuer, is considering plans to use USDT, which has established itself as an alternative to the dollar in countries subject to U.S. sanctions, such as Venezuela and Russia, for broader product transactions.

# Tether USDT is attractive due to low regulatory burden

A credit limit is essential for trading companies that transport goods worth millions of dollars, such as crude oil, metals, and food. Large players such as Trafigura have built a $77 billion credit network with 150 institutions, but smaller and mid-sized traders are struggling to secure funding.

In response to this, Tether is preparing to enter the commodity trading finance market. Tether CEO Paolo Ardoino said, “We are still in the early stages, and we will not disclose the specific investment size.” “The opportunities in the commodity trading market will be enormous in the future,” he predicted.

Tether’s loan transactions are attracting attention because they have less regulatory burden than traditional financial institutions and can speed up payments and transactions. Some officials analyzed that this would allow the commodity trading industry to quickly secure funds and maintain transportation.

# Potential change in the landscape of commodity trading finance

Commodity trading finance is one of the long-standing business models of traditional banks. Banks provide traders with a certain line of credit for purchasing and transporting cargo. These loans have been evaluated as relatively safe investments because they are based on highly liquid collateral.

But in recent years, bankruptcies, fraud and scandals at several large players have shaken confidence in the industry. Accordingly, some major financial institutions have reduced their financial support for natural resource transactions.

The analysis is that this has increased distrust in traditional finance and increased demand for stable coins and alternative finance with less regulatory burden.

In fact, payments through USDT are already active in Russia and Venezuela. Major Russian metal producers and Venezuelan state-owned oil company PDVSA are also using Tether for transactions. This is used as a means of circumventing U.S. financial sanctions, highlighting the importance of stablecoins.

Tether has also formed a related team to discover various opportunities for utilizing financial resources such as stablecoins, and is seeking investment opportunities in various areas such as alternative financial infrastructure in emerging markets, artificial intelligence (AI), and biotech.

Tether’s new move suggests the possibility of leveraging regulatory gaps to change the landscape of commodity trading finance and strengthen the influence of non-traditional finance, Bloomberg reported.

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