Tethers Venture Capital Arm to Invest 1 Billion in Next Year

Tether Unveils $1 Billion Investment Plan through Venture Capital Branch in Next Year


By Hassan Shittu
Last updated: June 11, 2024 17:48 EDT | 3 min read


Tether has revealed an ambitious investment strategy of more than $1 billion through its venture capital arm in the upcoming year. This move is part of Tether’s commitment to promoting innovation in alternative financial infrastructure, artificial intelligence, and biotechnology.
The company’s investment branch, Tether Investments, has already dedicated approximately $2 billion to these sectors over the past two years, with ongoing evaluations of numerous new proposals every month.
Tether’s Investment Focus on Financial Infrastructure, AI, and Biotech
Tether Holdings Ltd., the entity behind the world’s largest stablecoin, USDT, is planning to invest over $1 billion through its venture capital arm in the next year.
CEO Paolo Ardoino shared this ambitious plan in an interview with Bloomberg, highlighting Tether’s expanding financial influence and strategic emphasis on emerging technologies and markets. Tether Investments, the company’s investment arm, currently comprises a team of 15 individuals who review hundreds of proposals monthly, primarily from startup companies.
According to Ardoino, the team’s primary focus areas include alternative financial infrastructure for emerging markets, artificial intelligence, and biotechnology. Tether has already invested around $2 billion in these sectors over the past two years.
This investment strategy demonstrates Tether’s growing ambitions and financial strength. With a market capitalization of approximately $112.4 billion, the USDT stablecoin, designed to mirror the US dollar one-to-one, continues to gain traction.
Tether has recently been allocating most of the reserves backing USDT in US Treasury bills and other securities, resulting in substantial profits in the current high-interest-rate environment. While Tether intends to maintain 100% of its reserves plus an additional 6% cushion from its profits to ensure smooth USDT redemptions, it also plans to invest some of its remaining profits strategically.
A key component of this strategy involves investing in infrastructure in emerging markets to enhance its distribution network. Additionally, Tether has invested over $1 billion in artificial intelligence, including supporting data center operator Northern Data Group.
Based on its published attestation,
Tether reported a profit of $4.5 billion in the first quarter of this year
. Although these third-party attestations do not equate to full financial audits, they offer insight into the company’s financial well-being.
Despite regulatory scrutiny in the past and present regarding the quality and liquidity of the reserves backing stablecoins like USDT, Tether has successfully maintained its peg to the US dollar without major disruptions.
Ardoino emphasized the impact of these profits on Tether’s investment capabilities, stating,
He continued,
Recent Tether Investments
Tether recently made an investment of $18.75 million in XREX Group to enhance financial inclusion and facilitate cross-border payments in emerging markets. This investment, supported by prominent investors such as the Taiwanese Government National Development Fund and SBI Holdings, aims to introduce innovative financial solutions and drive advancements in regulatory technology.
The collaboration with XREX also seeks to strengthen regulatory technology (RegTech) to identify and prevent illicit use of stablecoins, aligning with Tether’s compliance efforts.
Additionally, Tether has recently made a substantial investment of $200 million in Blackrock Neurotech, a leading biotech company specializing in brain-computer interface (BCI) technology, through its new venture division, Tether Evo.
This strategic move positions Tether as the majority stakeholder in Blackrock Neurotech, with the goal of advancing medical solutions for individuals with paralysis, neurological disorders, and lost function.
This initiative is part of Tether’s broader strategy, which includes a recent major restructuring into four business divisions, contributing to its impressive growth and financial stability.
Despite challenges in the market and regulatory landscape, Tether remains a dominant force, boasting a significant market share and a market capitalization exceeding $100 billion.