Tether Allocates $100 Million to Agricultural Investment as Stablecoin Rivalry Intensifies

Tether has made significant strides into the agricultural sector with a $100 million investment aimed at acquiring a 9.8% stake in Adecoagro, a prominent agricultural enterprise in Latin America. This marks Tether’s inaugural venture into the agriculture and food industries, following previous investments in artificial intelligence, Bitcoin mining, and digital education.

Details of the Investment

Tether has stated in an official filing that it financed this investment using “cash from its own working capital.” Following this acquisition, the company holds 10,048,249 shares in Adecoagro, thus owning 9.8% of its total common shares.

Adecoagro, established in 2002, stands out as a leading milk producer in Argentina, with a processing capacity of 550,000 liters per day at its facility in Buenos Aires. The company diversified into sugar, ethanol, and energy sectors in Brazil starting in 2005, as noted on its website.

Increasing Competition in the Stablecoin Sector

Tether’s USDT, recognized as the largest stablecoin, currently boasts a market capitalization exceeding $118 billion. The competition in the stablecoin arena is growing, especially with Tether’s recent announcement regarding a new stablecoin project linked to the United Arab Emirates dirham (AED).

This forthcoming stablecoin will be developed in collaboration with UAE-based Phoenix Group and Green Acorn Investments, with plans for it to be fully backed by liquid reserves based in the UAE.

As new entrants to the stablecoin market make their presence felt, Tether faces increased competition. Notably, PayPal has launched a US dollar-pegged stablecoin, PayPal USD, which has already achieved a total market capitalization surpassing $1 billion.

In addition, Ripple Labs is conducting initial tests of its US dollar-pegged stablecoin, Ripple USD (RLUSD), on the XRP ledger and Ethereum mainnets, with intentions to support more blockchain networks in the future.

As of late August, the total market capitalization for stablecoins—excluding algorithmic types—reached a new milestone of $168 billion. This figure represents a rebound from a low of $135 billion at the close of 2022, following a previous peak of $167 billion in March 2022.