By Nermeen Nabil Khear 
Tether, the world’s largest stablecoin issuer, is looking to diversify its operations and broaden its influence in Web3 technology. The company has made a $2 million injection into Arcanum Capital’s Emerging Technologies Fund II, signaling its commitment to advancing Web3 projects.
As reported by the Financial news portal Traders Union, Tether’s investment in Arcanum Capital’s fund focuses on decentralized Web3 initiatives, aiming to enhance financial privacy, facilitate cross-border payments, and expand banking access for the unbanked.
Tether CEO Paolo Ardoino stressed the need to preserve individual freedoms in financial systems, emphasizing the role of censorship-resistant technologies.
“A key concern today is the evolving relationship between financial systems and individual freedoms, particularly in the context of increasing restrictions on open communication,” Ardoino stated.
Arcanum’s Managing Partner, James McDowall, also highlighted the fund’s mission to address vulnerabilities in traditional financial systems, particularly in geopolitically sensitive regions. The focus on blockchain-based secure remittance solutions seemingly aligns with Tether’s broader goals of financial autonomy and decentralization.
Tether seeks diversification through strategic investments
Tether’s investment in Arcanum is just one part of its diversification strategy. In October, Tether facilitated a $45 million oil transaction using its USDT stablecoin and proposed a boron-backed token to the Turkish government, leveraging Turkey’s global dominance in boron production.
The company also made headlines in December with a $775 million commitment to Rumble, a video platform known for its emphasis on free speech. The investment includes a $250 million cash injection and support for Rumble’s tender offer to purchase 70 million shares.
Following the announcement, Rumble’s stock surged by 50% in after-hours trading, showcasing Tether’s growing influence beyond cryptocurrency markets.
Tether is also venturing into artificial intelligence (AI), with plans to launch an AI platform in Q1 2025. According to CEO Ardoino, this platform will allow users to interact with AI through mobile devices, marking a significant step in the company’s innovation roadmap.
“Next year, we plan to deploy at least half of the profits in investments,” Ardoino said, underlining Tether’s aggressive approach to growth and diversification. “Our investment is just at the beginning.”
Regulatory challenges and opportunities
While the entity is experiencing significant growth, with its market capitalization surpassing $140 billion in 2024, the company faces regulatory challenges in Europe. The introduction of the EU’s Markets in Crypto-Assets (MiCA) regulations has made the relationship between the stablecoin issuer and European exchanges uneasy.
The European Union issued a directive mandating the delisting of USDT from exchanges by December 30, 2024, unless it complies with MiCA regulations.
MiCA, the EU’s comprehensive regulatory framework for cryptocurrencies, imposes strict requirements for transparency, auditing, and oversight of stablecoins. As one of the most actively traded digital assets, USDT faces potential removal from European exchanges if it fails to meet these standards, potentially causing significant disruptions to market activity and investor confidence.
Analysts suggest this could limit the stablecoin issuer’s reach in the region, but it also provides an opportunity to focus on the Americas, where crypto adoption is accelerating.
In the US, Tether’s expansion efforts align well with the crypto-friendly policies expected under President-elect Donald Trump’s administration. Howard Lutnick, CEO of Cantor Fitzgerald and a major Tether stakeholder, is set to join Trump’s cabinet as Commerce Secretary.
Lutnick’s involvement is expected to foster a favorable regulatory environment for digital assets and could aid Tether’s US growth trajectory.
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This articles is written by : Nermeen Nabil Khear Abdelmalak
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