S&P gave a "worst rating," but Tether's next step is even more concerning.

Author: 100y

Original title: To See Tether’s Future, Look at Its Investments

Compiled and organized by: BitpushNews

Preface

Recently, S&P downgraded Tether's rating to “the worst tier,” placing the world's largest stablecoin back in the spotlight.

In the narrative of traditional finance, this seems to imply risk, skepticism, and uncertainty; however, in the reality of the crypto industry, the share of USDT continues to expand, and Tether's investment landscape is rapidly extending, from gold and Bitcoin to global payments, infrastructure, and cross-border networks, a vast digital financial system is quietly taking shape.

Degradation and expansion intertwine, creating the most contradictory yet most real financial landscape of the moment:

The more unstable the traditional rating system becomes, the harder it is to ignore Tether's influence.

Summary

The order of empires and the status of currency have always been closely intertwined. The continuous expansion of USDT (Tether) signifies the quiet rise of a massive digital financial empire.

This article will deeply analyze Tether's recent investments in 20 companies, revealing the triple strategy of its empire blueprint:

Consolidate trust with Bitcoin and gold as the cornerstone, extend business reach to major continents around the world, and build a closed loop covering retail and institutional users through comprehensive products and services.

1. Tether and the Digital Financial Empire

1.1 Currency and Empire

Source: Dyken Wealth Strategies

Currency is a universally accepted medium of exchange and unit of value in daily life. However, from the perspective of empires, the role of currency goes far beyond simple transactions; it can be understood as a tool of power that encompasses political, cultural, and social functions. Throughout the history of empires, currency has played the following additional roles:

• Symbol of Imperial Order: The images of emperors or imperial emblems carved on coins visually embody the authority of the empire, serving as tokens to demonstrate the imperial order to the users.
• Tools of imperial rule: By concentrating the minting and issuing rights in the center, peripheral regions are compelled to rely on the monetary system of the core empire, thereby reinforcing imperial rule.
• The ruler of resource aggregation: The empire gathers resources from various places through taxes and tributes, while currency is the key medium that standardizes and facilitates the transfer of these resources.

Without exception, the status of currency has always synchronized with the status of the empire. When an empire grows and reaches its peak, its currency becomes strong and supports the empire. When an empire declines, its currency status also falls, accelerating the empire's collapse.

Today, terms like “empire” or “colony” have long disappeared, but we are far from free from these concepts. The United States plays the role of an empire supported by strong economic and military power, and the dollar has already served as the world currency.

Many non-U.S. countries have attempted to challenge the dominant position of the U.S. dollar in modern society, but all have failed. The dollar accounts for about 57% of global foreign exchange reserves and around 50% of SWIFT international settlements, firmly consolidating its position.

1.2 The Unstoppable Growth of USDT

Source: Artemis

With the development of information technology, a significant portion of the global economy has shifted to the internet. The emergence of blockchain technology has made it possible to securely use currency online, leading to rapid growth in the on-chain economy, and the currency used on-chain—stablecoins—has also quickly expanded to a scale of about 300 billion dollars.

Among the many stablecoins, the most noteworthy is Tether's USDT. USDT allows people in countries with highly unstable local currencies to easily access the dollar, this imperial currency. Even without credit or a bank account, anyone with an internet-connected mobile device can easily obtain dollars. This has opened the door for the rapid growth of USDT, especially in developing countries and third-world nations.

It is worth noting that despite the passage of the GENIUS Act and the gradual integration of blockchain into regulatory mainstream, the market share of USDT has not significantly decreased. USDT's share remains above 60%, which is more than double that of the second-ranked USDC.

1.3 Moving Towards a Massive Digital Financial Empire

Tether is building its vast empire powered by its strong currency USDT. However, building an empire is no easy task.

Although USDT is pegged to the US dollar, its reserves include not only highly liquid cash-equivalent assets such as cash, US Treasury bills, and repurchase agreements, but also relatively less stable assets like precious metals, Bitcoin, non-US government bonds, and corporate bonds. In major countries with established stablecoin regulatory frameworks, these types of assets are not legally accepted as reserves.

In fact, under the EU's MiCA regulatory framework, USDT has failed to meet several conditions for EMT (Electronic Money Tokens, which encompass the category of stablecoins). As a result, exchanges operating in Europe have delisted USDT, effectively removing it from use within the EU.

But Tether did not back down. As a company, Tether obtains equity by investing in various startups and enterprises, and sometimes even makes donations to non-profit organizations. By examining these actions, we can infer the direction Tether has chosen and how it seeks to build a vast digital financial empire. Let's take a look at Tether's investment cases to understand how it overcomes the challenges of empire building.

2. Which companies has Tether invested in?

2.1 Before You Start

Tether is a company that attracts full attention from the crypto community. This is understandable, as Tether is the issuer of the largest stablecoin USDT and is also considered the company with the highest income for every employee in the world.

However, the crypto community seems less interested in Tether's startup and corporate investment activities. More specifically, people are only deeply interested in protocols that issue Tether-supported tokens. Representative examples are the Stable and Plasma chains specifically designed for USDT.

However, these two projects were not directly invested in by Tether, but rather by related entities such as Bitfinex, USDT0, and Tether's CEO Paolo Ardoino.

Tether is very active in corporate investments, but most of the companies it invests in do not issue tokens and do not have a strong regional identity, so these investments have not attracted much attention from the crypto community. Nevertheless, looking at Tether's investment cases can still reveal clues about the direction Tether aims to pursue.

2.2 What types of companies has Tether invested in?

Tether announced its investments through a press release on its website. After analyzing approximately a year and a half of investment announcements, I was able to distill the following key themes:

• European Market: Although USDT has effectively been launched in the EU, Tether is still looking to enter the European market by investing in issuers and platforms within Europe.
• Emerging Markets: The market fit of USDT has been validated in emerging markets. Tether is strategically expanding its influence in these regions.
• Retail: Tether invests in various non-custodial wallet developers to ensure that retail users can easily access USDT.
• Institutions: In addition to retail and emerging markets, Tether also invests in solutions providers aimed at enterprises to help institutions access USDT more easily.
• Bitcoin: Tether has been continuously investing in BTC and the broader Bitcoin ecosystem.
• Gold: Tether views gold and BTC as important geopolitical assets and is accelerating its dual-axis strategy around Bitcoin and gold.
• Future Technology: Tether not only invests in currency-related businesses but also in advanced technologies that contribute to human society.

These themes reflect the coherent strategic direction that Tether aims to build its digital financial empire.

2.3 Indirect Strategy for Entering the European Market

StablR

StablR is a stablecoin issuer compliant with MiCA standards, registered in Malta, issuing EURR pegged to the Euro and USDR pegged to the US Dollar. While obtaining investments, StablR plans to utilize Tether's tokenization platform Hadron. Hadron is a SaaS platform designed to easily tokenize various assets such as stocks, bonds, commodities, and stablecoins, with strong capabilities in supporting complete token lifecycle management, KYC, AML, monitoring, and other regulatory compliance infrastructures.

Quantoz

Quantoz is a stablecoin issuer compliant with MiCA standards, offering EURQ and EURD (both pegged to the Euro) as well as USDQ (pegged to the US Dollar). Among them, EURD is specifically designed for closed-loop systems, and compared to EURQ, EURD can be understood as a general-purpose stablecoin. Quantoz also plans to utilize Tether's Hadron tokenization platform.

Bit2Me

Bit2Me is the largest digital asset platform in the Spanish-speaking world. Individuals, businesses, and institutions can trade and invest in various cryptocurrencies within it, connecting to various financial activities such as remittances, payments, and lending. Founded in 2014, Bit2Me has been operating for over ten years and has more than 1.2 million users, making it a major platform. Notably, Bit2Me operates under MiCA compliance and holds a CASP license, which makes it a highly strategic investment for Tether.

2.4 Targeting Emerging Markets

Parfin

Parfin is an institutional blockchain infrastructure company based in Latin America. Parfin provides a management and workflow platform that enables financial institutions to easily adopt blockchain technology and cryptocurrencies, secure MPC wallet solutions, and asset tokenization services. Parfin has also received investments from leading global venture capital firms such as Framework, Valor, Accenture, and ParaFi. By investing in Parfin, Tether aims to help financial institutions in Latin America use USDT more easily.

Kotani Pay

Kotani Pay is a Web3 payment infrastructure company based in Africa, providing services such as fiat deposits and withdrawals, stablecoin settlement and payments, and SMS-based blockchain wallets. By investing in Kotani Pay, Tether plans to expand the deposit and withdrawal infrastructure to make it easier for people in Africa to access USDT.

Shiga

Shiga is a blockchain financial solutions company headquartered in Africa, providing a wide range of blockchain services, including deposits and withdrawals between local currencies and stablecoins, over-the-counter trading (OTC), corporate virtual accounts, corporate fund management, and blockchain solution development. These services enable individuals and businesses in Africa to easily access the dollar economy through on-chain finance. Tether has stated that it views Africa as a key region for USDT adoption and is investing in Shiga to actively expand into the African continent.

Sorted

Sorted is a wallet solution company headquartered in Africa and South Asia, offering a non-custodial wallet that runs smoothly on basic feature phones and low-end smartphones. This significantly increases financial accessibility for the impoverished or unbanked populations. Users of Sorted can easily make cryptocurrency remittances, payments, and deposits and withdrawals. By investing in Sorted, Tether also expands its influence in Africa and South Asia.

Kem

Kem is a widely used cryptocurrency remittance, payment, and financial management application in the Middle East. Users can use their crypto assets for remittances and payments within the Kem app, link them to physical cards, and even invest in assets like gold. Like Africa and Latin America, the Middle East has a large number of foreign workers, so USDT-based cryptocurrency remittances can greatly stabilize their lives. Tether plans to expand USDT's market share in the Middle East by investing in Kem.

CityPay

CityPay is a cryptocurrency payment company based in Georgia. In addition to Georgia, it is actively expanding its business into Eastern Europe, including Armenia, Azerbaijan, Kazakhstan, and Uzbekistan, by offering wallet services, launching payment cards, and acquiring cryptocurrency payment merchants. By investing in CityPay, Tether aims to strategically secure USDT's share in the Eastern European payment market.

2.5 Retail Strategy

It is important to note that the Sorted and Kem mentioned above are also non-custodial wallet solution companies that can be categorized under retail strategies.

Fizen

Fizen is a consumer-oriented crypto super app. Users can store, transfer, and use cryptocurrencies for payments through a self-custody wallet. Fizen also offers features such as payments, shopping, and gift cards, enabling users to easily integrate cryptocurrencies into their daily lives. By investing in Fizen, Tether aims to provide USDT users with a high-quality user experience, allowing USDT to be widely used for everyday payments.

Be Water

Be Water is a media and content company based in Italy, engaged in various businesses such as film, television, and documentary production and distribution, and operates a news brand. Tether invested €10 million to acquire a 30.4% stake in Be Water, which provides Tether with a foothold to move beyond the financial sector and expand into the global content ecosystem.

Zengo

Zengo is a wallet solution based on MPC (Multi-Party Computation) that allows users to securely use a self-custody wallet without having to manage complex mnemonic phrases. By investing in Zengo, Tether enables users to store, send, and use Tether-based assets for payments more securely.

2.6 Institutional Strategy

It is important to note that Parfin is also a company serving financial institutions in Latin America, and is therefore included in the institutional strategy.

Crystal Intelligence

Crystal Intelligence is a blockchain intelligence company responsible for fraud detection, risk monitoring, real-time wallet address analysis, regulatory support, illicit fund tracking, and crime response. By investing in Crystal Intelligence, Tether plans to strengthen its collaboration with them and enhance its ability to prevent USDT from being misused for illegal activities. This is a significant strategic investment for the advancement of USDT as an institution-friendly stablecoin.

2.7 Investment in the Bitcoin Industry

Ledn

Ledn is a Bitcoin-backed lending platform that allows individuals and businesses to borrow stablecoins using BTC as collateral without having to sell their BTC. Tether has focused on building the infrastructure that connects crypto assets to real-world financial use cases, and since Ledn is pioneering a new market for Bitcoin finance, Tether invested in Ledn.

adecoagro

Adecoagro is the largest sustainable agriculture and renewable energy company in South America and is also listed on the New York Stock Exchange. Adecoagro sells a portion of its generated electricity on the spot market, but due to the high volatility of prices, revenues can be unstable. From this perspective, Bitcoin mining can serve as a fixed electricity buyer. Tether plans to acquire up to 70% of Adecoagro's shares to jointly promote Bitcoin mining projects.

BTCPay Server Foundation

BTCPay is an open-source payment processor for Bitcoin and stablecoins. It uniquely adopts a self-hosted model, allowing users to run it directly on their own servers. Tether has supported BTCPay for two consecutive years to strengthen the infrastructure for censorship-resistant payments using Bitcoin and USDT.

OpenSats

OpenSats is a 501©(3) public charity in the United States that funds Bitcoin and anti-censorship technologies. OpenSats operates a sustainable model supporting the Bitcoin open-source ecosystem, with donations directed towards Bitcoin protocol development, privacy tool development, research, and education. Although this is not an investment, Tether has consistently donated to OpenSats, indicating its ongoing support for Bitcoin and the open-source ecosystem.

2.8 Gold as a Geopolitical Asset

Elemental Altus Royalties

Elemental Altus Royalties is a company related to gold mining, but it does not mine directly. Instead, it generates revenue by entering into royalty agreements with gold mining companies. Tether views gold alongside Bitcoin as part of the infrastructure for digital currencies and, in order to strengthen its gold-related strategy, it has acquired a 31.9% stake in Elemental Altus Royalties.

Alloy

Alloy is a service directly launched by Tether, rather than being an investment company, but it is included here because it plays a key role in Tether's gold-related strategy. Tether offers a gold token service called XAUT, while Alloy is a service that issues aUSDT, which is a stablecoin backed by gold collateralized by XAUT. This is an attempt to replicate the historical gold standard and is part of Tether's initiative to strengthen its gold-bitcoin strategy.

2.9 Investment in Future Technologies

Blackrock Neurotech

Blackrock Neurotech is a leading company in the field of brain-computer interfaces, founded by a research team from the University of Utah. The technology developed by the company implants electrodes in the brain, converting thoughts into digital signals. Individuals with mobility impairments, lack of sensory functions, or communication challenges can significantly improve their quality of life through Blackrock Neurotech's technology. With this investment, Tether becomes a major shareholder, marking its ambition beyond the financial sector into advanced future technologies that serve humanity.

( 3. Tether's Strategy for Building a Digital Financial Empire

![image.png])https://img-cdn.gateio.im/webp-social/moments-b8cafc2af9f5252e4fe3de2ad4be1f9c.webp “1764354352259798.png”(

Source: Tether

Tether holds $135 billion in U.S. Treasury bonds, a massive figure that ranks it 17th globally, surpassing South Korea.

In fact, Tether has established a digital empire based on its currency USDT.

Through the companies recently invested in by Tether, we can observe Tether's strategy for building a digital empire.

• Ensure Trust: Tether aims to ensure user trust through its two main assets, Bitcoin and gold.
• Global Expansion: Tether seeks to cover major continents around the world, including Asia, Africa, South America, Europe, the Middle East, and recently entering the U.S. market through USAT.
• Improve Accessibility: Tether aims to enable retail users, businesses, and institutions to easily access USDT in their daily lives and financial activities through various services.

Some have predicted that as blockchain becomes increasingly regulated, the status of Tether and USDT will weaken, but this prediction has proven to be incorrect. I have no doubt that the U.S.-centered stablecoin industry will continue to grow, and I firmly believe that the influence of Tether and USDT will accelerate.

In the end, we are standing on the brink of a digital empire based on USDT, an empire so large that it cannot fail.