Tether Invests $100 Million in Agriculture Company as Stablecoin Market Gets More Competitive
Date: 2024-09-09 Author: Oliver Abernathy Categories: BUSINESS
Tether, the issuer of the world’s largest stablecoin, has invested $100 million to acquire a 9.8% stake in Latin American agriculture giant Adecoagro. This is Tether’s first investment in the agriculture and food sector.
Tether has previously made strategic investments in emerging technologies such as artificial intelligence and peer-to-peer platforms, bitcoin mining, and digital education initiatives, according to the company’s filing.
Tether used its own cash to make the investment
In its filing, Tether said it “used cash from its own working capital” to invest in Adecoagro. Tether now owns 10,048,249 shares of Adecoagro, representing 9.8% of the “common shares outstanding.”
Founded in 2002, Adecoagro is the largest milk producer in Argentina, with a processing capacity of 550,000 liters per day at its Buenos Aires plant. In 2005, the company expanded into the sugar, ethanol, and energy markets in Brazil.
USDT Faces Growing Competition in the Stablecoin Market
Tether’s USDT is the largest stablecoin with a market cap of over $118 billion, according to CoinMarketCap. Tether recently announced plans to launch a new stablecoin pegged to the UAE dirham (AED).
The new stablecoin will be launched in partnership with UAE-based Phoenix Group and Green Acorn Investments. The collaboration aims to create a digital version of the dirham that will be “fully backed by liquid reserves in the UAE.”
However, competition in the stablecoin market is intensifying with the emergence of new players, such as PayPal USD, a stablecoin pegged to the US dollar, which has already surpassed $1 billion in market cap.
Ripple Labs also announced the first tests of its Ripple USD (RLUSD), a stablecoin pegged to the US dollar, on the XRP Ledger and Ethereum blockchains. The company plans to launch a fiat-backed token on other blockchain networks in the future.
On August 26, the market cap of stablecoins, excluding algorithmic ones, reached a record $168 billion. In March 2022, the market reached an all-time high of $167 billion, but by the end of that year it had fallen to $135 billion.
