Tether ventures into trade finance, facilitating a $45M crude oil deal, aiming to revolutionize global trade with USD₮ solutions.
Tether, the leading company in the digital asset industry, recently announced a major development in its Trade Finance division. In October 2024, Tether facilitated its first crude oil transaction, marking a significant step in its expansion into the global commodities market.
The deal, valued at around $45 million, involved the transportation of 670,000 barrels of Middle Eastern crude oil. This deal is between a listed super-major international oil firm and a major physicals trader. It demonstrates Tether’s increasing role in trade finance and commodities.
The funding, done by Tether Investments, is part of a more significant effort by the firm to transform the trade finance sector. In the first half of 2024, Tether launched its Trade Finance business to enhance the efficiency of global trade by offering straightforward capital solutions. Tether seeks to get involved in the $10 trillion trade finance market by providing affordable and easily accessible funds. This is the initial attempt to bring digital assets to the traditional sectors. As a result, Tether can benefit from the high profitability mentioned in the Q3 2024 attestation.
Tether Expands Trade Finance, Eyes Growth Beyond Crude Oil
Paolo Ardoino, Tether’s CEO, highlighted the firm’s determination to revolutionize the trade finance sector using USD₮. As per Ardoino, USD₮ is far more effective than the previously used payment models, which have long been ineffective. The ability to use Tether’s stablecoin in international trades is a major selling point. It provides the added benefit of shortening the time for payment and the cost of doing so for businesses across industries.
This financing is just the start for Tether regarding trade finance. In this transaction, it focused on crude oil. However, it intends to diversify its product portfolio to other commodities and sectors. Tether aims to provide the same fast and effective solutions as in segments such as agriculture, technology, and asset-backed sectors to make the global financial system more open and innovative.
In addition, the use of USD₮ in trade finance transactions means that these deals meet high compliance standards for businesses such as AML. This is supported by the fact that blockchain has a level of transparency in that it can easily show a record of transactions. Lastly, this new initiative by Tether is expected to create more lending opportunities. It will also benefit various industries and drive positive change in trade finance.
