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BFD Expert Voices - Private Credit

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Tether, the world's largest stablecoin issuer expects to invest about $2.5 billion to $3 billion across five main areas in 2025, CEO Paolo Ardoino tells Axios.

Why it matters: That pace would align with some of the world's biggest VC funds.

Driving the news: Tether is arguably the largest winner in the recent stablecoin boom and is using its fortunes to grow in and beyond crypto.

Ardoino says the company is tracking toward a record $10 billion in net profits this year.

The company does not release audited financials, but it did post $7.7 billion in profits for the first three quarters in an attestation conducted by BDO.

Tether has chosen to re-invest much of that capital through its investment arm, which is kept separate from its stablecoin business and reserves. That investing arm held about $7.7 billion in assets as of the third quarter of the year, according to the attestation.

"If we have any issues on the investment side, it should not spill out onto the … stablecoin business," he says.

Between the lines: Ardoino sees the investment arm in five prongs: artificial intelligence, finance, biotech, education and mining.

Many of these deals have a clear line of sight to bolster Tether's established stablecoin business. For instance, he says Tether has made 20 or so deals in remittance businesses across emerging markets, to help Tether build an on-the-ground network.

Ardoino sees emerging markets as key to growing stablecoin adoption.

The company also recently became a short-term liquidity provider in oil deals, seeing stablecoins as a way to speed up payments in the commodity industry.

"Priority No. 1 of Tether is growing the acceptance and the infrastructure around our stablecoin," he says.

Zoom out: Other bets in biotech or AI are less directly accretive but speak to the broader role Ardoino sees Tether playing in the future.

Tether bought a majority stake in Blackrock Neurotech, a brain-computer interface business, in April for $200 million.

"I think that we are a technology company rather than a stablecoin company," he says.

The intrigue: The company has reportedly been under regulatory scrutiny, with a Wall Street Journal report stating that the federal government is probing the business for potential sanction violations.

Tether has said it's unaware of any ongoing investigation.

Context: For context, General Catalyst raised $8 billion for its recent funds, Andreessen Horowitz raised $7.2 billion across some five funds, and Lightspeed Venture Partners is reportedly aiming for some $7 billion for three new funds.

These amounts are typically deployed over three to five years rather than one.

The bottom line: That is not a perfect comparison, as Tether does not always make venture-like bets and takes strategic stakes. But it does give a sense of just how big an investment player it's becoming.

Tether looks to invest up to $3B in 2025

The stablecoin issuer said its investment arm holds $7.7 billion.

Illustration of a row of cube-shaped bags of money

Tether, the world&#x27;s largest stablecoin issuer expects to invest about $2.5 billion to $3 billion across five main areas in 2025, CEO Paolo Ardoino tells Axios.Why it matters: That pace would align with some of the world&#x27;s biggest VC funds.

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Tether looks to invest up to $3B in 2025

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