Crypto company Tether and its founders finalize move to El Salvador

DUBAI: Cryptocurrency company Tether plans to move its headquarters to El Salvador, as the founders of the world’s largest stablecoin seek to capitalize on the Central American country’s bid to become a crypto trading hub. cash.

Tether has become a dominant force in the booming market for stablecoins, designed to maintain a constant value by being pegged to traditional currencies and offering users a way to move money between cryptocurrencies without being exposed to fluctuations of price.

CEO Paolo Ardoino told Reuters that Tether would move to El Salvador after Tether recently obtained a digital asset service provider license there, and that he and other executives as well as co-founders would move to live there. The company was previously incorporated in the British Virgin Islands.

“This move to El Salvador will be the first time that we also have a physical headquarters,” he said, adding, however, that the company does not plan to relocate all of the more than 100 employees, with the majority of the work remaining at distance. .

The booming stablecoin market has worried regulators, worried that the growing reserves of stablecoins expose the broader financial system to greater risks, as they act as a bridge between the crypto universe and traditional financial markets.

Tether has faced questions regarding its reserves and does not fully disclose where they are held and in what form. The company says the vast majority of its stablecoins are backed by traditional currency reserves held at Wall Street brokerage firm Cantor Fitzgerald, whose CEO is Trump’s nominee for next U.S. Commerce Secretary.

“So we have liquidity at other banks, but the vast majority of Treasuries are at Cantor,” Ardoino said.

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The company said last year that it was increasingly monitoring how its tokens are used to combat illicit financing.

When asked if Tether had considered other locations for its headquarters, Ardoino said it does not have a license to operate in the European Union and has ruled out the United States for now . It’s “pretty premature” to predict what kinds of changes Trump might make as president, he added.

The election of Trump as the next US president has sparked a rally to record highs for cryptocurrency prices. Trump has pledged to introduce a friendlier regulatory environment for crypto and said he plans to create a US strategic reserve for bitcoin.

El Salvador is seeking to become a hub for digital currency trading, and three years ago President Nayib Bukele made it the first country to establish Bitcoin as legal tender, alongside the dollar.

Tether’s eponymous dollar-pegged token, USDT=CCCL (USDT), represents about two-thirds of the $212 billion worth of stablecoins in circulation, according to CoinGecko data.

The overall market has grown about 45 percent over the past year, according to the data.