Tether Holdings Limited is best known as the operator of USDT, the world’s largest stablecoin, but it now also operates several other new businesses and investments.
As the largest stablecoin issuer, Tether has dominated the market for several years now and is reaping impressive profits. According to company attestations, it posted $4.5 billion in profit for the first quarter of 2024 alone.
Even so, stablecoins are coming under increasing regulatory scrutiny worldwide, meaning that operating solely as a stablecoin business comes with some risk. As part of its ongoing mission to ensure Tether’s longevity and reach beyond stablecoins, the company has recently reorganized into several new business divisions.
History of Tether
Tether was originally founded in 2014 under the name Realcoin by three co-founders, Brock Pierce, Reeve Collins, and Craig Sellars. It had emerged from a project called Mastercoin, which was focused on issuing currencies on top of the Bitcoin blockchain.
Mastercoin later became Omni, which was the first platform on which USDT was issued in October 2014. Before the end of its inaugural year, Realcoin had been renamed Tether. IFinex, the company behind the Bitfinex exchange, was also involved in Tether from an early stage and became the operator of both projects.
During the 2017 bull run, demand for USDT increased dramatically, resulting in the market capitalization growing by over 13,000% to reach $1.38 billion by December of the same year. By 2019, USDT was outpacing BTC in trading volumes, and by April 2021, the market cap of USDT had exceeded $50 billion.
The company has also been embroiled in several controversies. In 2019, it faced allegations that it had loaned part of its reserves to sibling company Bitfinex. In 2021, the company was fined by the US Commodity Futures Trading Commission (CFTC) for failing to maintain adequate reserves backing its stablecoins. Since then, the company has implemented a Transparency policy that includes quarterly audits.
In April 2024, Tether announced a new strategic direction with the intent to “broaden its mission towards delivering a range of infrastructure solutions for a more inclusive world.”
In June 2024, Tether CEO Paolo Ardoino announced that the company planned to invest over $1 billion into deals spread across its new business divisions over the coming twelve months.
Tether’s Business Divisions
Since May 2024, Tether has divided itself into five business units, which are called Finance, Power, Data, Edu, and Evo.
Tether Finance
Tether Finance is the division responsible for the company’s stablecoin business, also known as Tether Tokens. Most of Tether’s value comes from USDT, which has a market capitalization of nearly $120 billion as of Q4 2024. USDT is issued across multiple platforms, including Ethereum, Solana, Algorand, Cosmos, Tezos, and more.
Tether Tokens also include stablecoins pegged to the Euro (EURT), Mexican peso (MXNT), offshore Chinese yuan (CNHT) and gold (XAUT). By contrast, EURT is the next-largest Tether Token after USDT, with a market capitalization of just over $26 million as of September 2024.
All Tether Tokens are backed 100% by Tether’s reserves. The company publishes quarterly reports on its reserves in collaboration with independent auditor BDO Italia.
Read more about how Tether Tokens work.
Tether Power
Tether Power is dedicated to sustainable Bitcoin mining, using a strategy of grid stabilization, which aims to us eexcess energy from renewables at times of lower demand. The firm operates 15 active Bitcoin mining sites in Uruguay, which is considered a leader in the field, and transitioned to over 90% renewable energy sources.
Tether Power is also responsible for MoS, the company’s IoT platform built to integrate mining infrastructure into a fully decentralized P2P network covering all mining operations, including cooling systems.
Tether Data
Tether Data makes strategic investments in technologies at the leading edge of AI and P2P technologies. One example is Holepunch, which develops Keet, a P2P platform for digital communication and the exchange of data. It supports private, encrypted video and text-based exchanges without file size limits.
Holepunch also develops Pears, an open-source runtime that supports the development of P2P applications.
Tether Data has also invested in Northern Data, which provides AI compute.
Tether Edu
Tether Edu is an education platform launched by Tether in February 2024 to “foster the accessibility of digital skills development while promoting self-development and self-realization.” The platform offers courses and educational content covering a wide variety of emerging markets disciplines, including blockchain, design, AI, coding, and more.
Tether Edu also supports the Plan B network, a network of Bitcoin educators and builders.
Tether Evo
Tether Evo is another investment arm focused on projects that Tether deems pioneering, innovative, and evolutionary. Its flagship project is Blackrock Neurotech, which develops brain-computer interfaces that support communication, rehabilitation, and cognitive enhancement.
Tether Holdings Limited essentials
- Tether Holdings Limited is the company that operates USDT, the world’s biggest stablecoin, along with several other fiat-pegged tokens.
- In early 2024, the company restructured into five new business divisions, reflecting a new strategic pivot beyond a pure stablecoin business.
- Tether now operates businesses and investments in areas including sustainable Bitcoin mining and AI and P2P technologies.