Thomas Daniels
As it continues to accumulate substantial financial reserves, Tether, the $140 billion stablecoin issuer, is speeding up its investment development outside of the cryptocurrency space. Tether is using its financial strength to diversify its portfolio and currently has $7 billion in excess reserves, according to a Bloomberg story that cited people with knowledge of the situation.
According to a person close to the company, Tether’s investing strategy may seem out of the ordinary, but it is intended to reduce possible risks to its USDT stablecoin. The European market is currently adapting to the Markets in Crypto-Assets (MiCA) regulatory framework at the time of its expansion. To adhere to local laws, major cryptocurrency exchanges Coinbase, Kraken, and Crypto.com have declared their intention to delist USDT.
According to on-chain data, after MiCA was fully implemented in December 2024, Tether’s market capitalization fell by more than 1%. The company’s approach has been compared to petro-states’ diversification plans, which reinvest oil profits in a range of sectors, like Saudi Arabia.
Tether has already started diversifying its holdings beyond cryptocurrency. Notably, the company has been actively investing in European businesses, such as StablR, which recently introduced stablecoins EURR and USDR that are compliant with MiCA, and it recently purchased a $775 million interest in the social networking platform Rumble.
Tether’s strategic diversification attempts to strengthen its long-term position in the financial landscape as regulatory scrutiny rises and competition from new stablecoins intensifies.
