Tether and El Salvador are embarking on a path that befits only true Bitcoin pioneers. Tether Holdings, the issuer of the first fiat-backed stablecoin, USDT, and El Salvador, the first sovereign country to make Bitcoin (BTC) legal tender, are aiming for closer collaboration than ever before.

Yesterday, Tether announced it will relocate its headquarters to El Salvador. This strategic decision strongly endorses El Salvador as a growing crypto hub and an increasingly influential country in Central America.

El Salvador’s efforts, if anything, appear to be paying off.

The Migration of Financial World To Litte Nation in Central America

Paolo Ardoino, the CEO of Tether, said the stablecoin issuer is moving to Central America after obtaining an operating license, which allows it to operate as a digital asset service provider.

This relocation is a key milestone for Tether.

Since its launch, this is the first time Tether has established a physical headquarters, as it is effectively transitioning from its previous physical incorporation in the British Virgin Islands.

This shift will require the entire management team, including CEO Ardoino, to relocate their residences to El Salvador. However, a vast majority of its employees will continue working remotely.

Reports also indicate that Tether will hire 100 local employees in the coming years as part of its expansion plans.

Why El Salvador?

Choosing El Salvador as their headquarters is not surprising.

El Salvador is pro-crypto, becoming the first country to adopt BTC as legal tender in 2021. They even established a Bitcoin buying plan, creating their own reserve.

Furthermore, President Nayib Bukele has launched multiple initiatives, including encouraging using Bitcoin as an effective remittance tool.

Amidst these efforts, a major announcement from El Salvador outlined plans to leverage their vast renewable energy sources for Bitcoin mining.

And with 170 volcanoes…
⁰A “rent your volcano to mine Bitcoin” program might actually make sense https://t.co/BENtEqher1

— Nayib Bukele (@nayibbukele) November 24, 2024

Their efforts and a pro-crypto stance have attracted global attention, especially from crypto tech firms. Among them, Tether has made concrete efforts to establish a base in El Salvador.

Tether: An Influence in Crypto

If El Salvador’s policies continue to support crypto, it is highly likely that more firms will follow Tether.

It is easy to see why.

Tether has issued hundreds of billions of USDT and is undoubtedly the leader in the stablecoin market, facilitating the smooth trading of crypto assets worldwide.

According to Coingecko, there are over $137 billion. The number will only increase now that Bitcoin’s and altcoins’ uptrend is shaky.

(Source)

Fiat-backed stablecoins like USDT boost crypto liquidity, allowing for a simple shift of capital from traditional to cryptosystems. At the same time, they are increasingly playing a key role in remittance.

While Tether has been growing, it has not been without challenges.

The lack of an audited report for many years drew scrutiny from regulators.

To address this, Tether is ramping up its transparency efforts. Recent statements reveal that most of its reserves are held in United States Treasury bills.

Tether is Diversifying: Mining and Buying Bitcoin

Tether has also been diversifying, buying BTC, and investing in crypto mining infrastructure.

Bitcoin Treasuries reveal that Tether holds 82,100 BTC, a stash as they diversify. From this, BitInfoCharts ranks Tether’s wallet the sixth richest BTC address.

(Source)

The USDT issuer is also involved in Bitcoin mining operations in Paraguay, helping strengthen the network.  

Ardoino announced in late 2023 plans to invest $500 million in the first half of 2024 to boost its mining efforts.

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