Tether Invests $100M in Agriculture Firm Amid Growing Stablecoin Competition

September 09, 2024 04:42 PM AEST | By Team Kalkine Media

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Tether Invests $100M in Agriculture Firm Amid Growing Stablecoin Competition — Image source: shutterstock

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Tether, the issuer of the largest stablecoin, has made a notable move into the agriculture and food sector with a $100 million acquisition of a 9.8% stake in Adecoagro, a prominent Latin American agricultural company. This investment marks Tether’s entry into the agriculture and food industry, diversifying its portfolio beyond previous investments in artificial intelligence, Bitcoin mining operations, and digital education.

The transaction involved the use of {Tether} (USDT) working capital. According to the company’s filing, Tether now holds 10,048,249 shares in Adecoagro, equating to a 9.8% ownership of the company's outstanding common shares. Adecoagro, established in 2002, is a significant player in Argentina's dairy sector with a processing capacity of 550,000 liters per day at its Buenos Aires facility. The company also expanded into the sugar, ethanol, and energy sectors in Brazil in 2005.

In addition to this agricultural investment, Tether is expanding its presence in the stablecoin market. The company has announced plans to launch a new stablecoin pegged to the United Arab Emirates dirham (AED), in collaboration with UAE-based Phoenix Group and Green Acorn Investments. This new digital dirham will be fully backed by liquid UAE-based reserves.

The stablecoin market is becoming increasingly competitive. New entrants such as PayPal’s US dollar-pegged stablecoin, {PayPal USD} {PYUSD} , have already surpassed $1 billion in market capitalization. Ripple Labs is also advancing its stablecoin initiatives with the testing of its Ripple USD (RLUSD) on both the XRP ledger and Ethereum mainnets, with plans for broader blockchain integration.

As of August 26, the market capitalization for stablecoins, excluding algorithmic types, reached a record $168 billion. This figure surpasses the previous all-time high of $167 billion recorded in March 2022, although it fell to $135 billion by the end of the year.

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