Tether, the issuer of the world’s largest stablecoin, has invested $100 million to acquire a 9.8% stake in Latin American agricultural giant Adecoagro. This is Tether’s first investment in the agriculture and food sector.  

Previously, Tether had made strategic investments in emerging technologies, such as artificial intelligence and peer-to-peer platforms, Bitcoin (BTC) mining operations, and digital education initiatives, the company said in a filing. 

Filing with the US Securities and Exchange Commission. Source: sec.gov

Tether used working capital funds for the investment

Tether said in its filing that it “used cash from its own working capital” for the Adecoagro investment. Tether now owns 10,048,249 shares of Adecoagro, representing 9.8% of the “outstanding common shares”.

Founded in 2002, Adecoagro is a major milk producer in Argentina, with 550 thousand liters per day of processing capacity at its Buenos Aires plant in Argentina, according to its website. The company entered sugar, ethanol and energy businesses in Brazil in 2005. 

USDT sees increasing competition in stablecoin market

Tether’s USDT (USDT) is the largest stablecoin, boasting a market capitalization of over $118 billion, according to data from CoinMarketCap. Tether recently announced plans to introduce a new stablecoin pegged to the United Arab Emirates dirham (AED).

The new stablecoin will be launched in partnership with UAE-based Phoenix Group and Green Acorn Investments. This collaboration aims to create a digital version of the dirham currency, which is “fully backed by liquid UAE-based reserves.”

USDT’s financials. Source: CoinMarketCap

However, competition has been intensifying in the stablecoin market with the introduction of new players, like PayPal’s US dollar-pegged stablecoin, PayPal USD, which has already surpassed $1 billion in total market capitalization. 

Ripple Labs has also announced the first tests of its United States dollar-pegged stablecoin, Ripple Labs’ Ripple USD (RLUSD), on the XRP ledger and Ethereum mainnets. It plans to launch the fiat-backed token on more blockchain networks in the future.

On Aug. 26, the market capitalization for stablecoins, excluding algorithmic ones, hit a record $168 billion. The market hit an all-time high of $167 billion in March 2022 but fell to $135 billion by the end of that year.

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