In a surprising departure from its origins as a stablecoin issuer, Tether has entered the agricultural sector.
Stablecoins are essential in the realm of cryptocurrency, as they provide users with a means of accessing stable assets such as the US dollar or gold. Tether’s USDT stablecoin is the most valuable, with a valuation of nearly $120 billion and a daily trading volume that frequently surpasses that of Bitcoin.
In April, Tether presented its intentions to expand beyond its stablecoin origins, indicating a new chapter for the crypto colossus. Nevertheless, the company’s recent $100 million investment in Adecoagro, a South American agricultural firm, has taken many by surprise.
Tether Holdings Limited acquired a 9.8% stake in South American agricultural colossus Adecoagro, according to an SEC filing from last month. According to Wu Blockchain, this represents Tether’s initial substantial foray into the agricultural sector, with an estimated value of $100 million.
Adecoagro is a company that produces a variety of commodities, including maize, wheat, sunflowers, soybeans, and rice, in Brazil, Argentina, and Uruguay. The company has also expanded its operations to include dairy production and the production of renewable energy from its agricultural output, such as bioelectricity from sugarcane fiber and ethanol for fuel.
In April, Tether formalized its diversification strategy by dividing its operations into four distinct divisions: Data, Power, Finance, and Education. Despite the fact that the investment in Adecoagro represents a departure from stablecoins, it does not smoothly fall into these new divisions, which has surprised some observers.
In June, Tether disclosed the establishment of a new $1 billion investment fund. Signaling a significant expansion beyond its stablecoin origins, the fund aims to invest in alternative financial infrastructure for emergent markets, AI, and nanotechnology.
CEO Paolo Ardoino of Tether emphasized the fund’s selective investment strategy. Tether operates differently than a conventional venture capital firm, which prioritizes profitability potential, despite the fact that it receives hundreds of proposals each month. Ardoino, on the other hand, observed that the fund exclusively invests in “projects that we find to be exceedingly intriguing.”
Ardoino reflected on his boyhood recollections at his grandparents’ estate when discussing the Adecoagro transaction. He also reminisced about the “greatest olive oil you could ever taste,” which suggests a personal connection behind the investment.
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