Stablecoin issuer Tether and its investment arm, Tether Investments, have revealed their intention to allocate more than $1 billion to various investment opportunities over the next 12 months.
According to a Bloomberg report, Paolo Ardoino, Chief Executive Officer behind the USDT stablecoin, shared insights into the company’s next investment strategies and areas of focus in a recent interview.
Tether’s Expansion Plans
According to the report, the firm is particularly interested in alternative financial infrastructure for emerging markets, artificial intelligence (AI), and biotechnology, with approximately $2 billion invested in these sectors.
Tether has invested most of its reserves, which back USDT, in US Treasury bills and other securities. This strategy has resulted in significant profits amid the prevailing high-interest-rate environment.
While Tether remains committed to retaining 100% of its reserves and setting aside an additional 6% cushion from profits to ensure redemptions of USDT, the company plans to allocate a portion of its remaining profits to investment opportunities.
During the interview, Ardoino emphasized the company’s focus on expanding its distribution network and investing in infrastructure within emerging markets. The company has already allocated over $1 billion to AI initiatives, including support for Northern Data Group, a data center operator.
Ardoino stated that Tether’s investments aim to leverage technology that facilitates disintermediation in traditional finance, reducing dependence on major tech companies like Google, Amazon, and Microsoft.
Additionally, the company’s CEO highlighted that Tether’s profitability has attracted many potential investment opportunities globally, with the company receiving “dozens or even hundreds” of proposals each month. However, Tether selectively chooses only a small percentage of these opportunities.
Venturing Into Biotech Amid Industry Retreat
Tether’s recent efforts to diversify beyond stablecoins, which have faced regulatory challenges worldwide, have positioned the company as a significant deal-maker. As Bitcoinist reported in April, Tether reorganized into four divisions focusing on finance, data, Bitcoin mining and energy, and education.
Moreover, the stablecoin issuer also plans to launch a platform later this year, enabling companies to issue bonds and equity in digital-token form while also providing central banks the capability to offer central-bank digital currencies (CBDCs).
Ardoino explained that Tether’s approach to investing differs from traditional venture capitalists in that it doesn’t just look for companies expected to reach profitability targets within the next year or two. Instead, Tether invests in projects that it finds “exceptionally compelling,” and that align with its strategic vision.
In addition to its interest in AI and emerging markets, the firm reportedly makes forays into the biotech sector. In particular, it has backed Blackrock Neurotech, a company specializing in brain-computer interface technology. Ardoino expressed Tether’s willingness to invest in biotech when other players have scaled back their involvement in the space.
Featured image from Shutterstock, chart from TradingView.com