Tether — the leading stablecoin issuer behind USDT — is looking at artificial intelligence (AI) and emerging technologies as opportunities for the company to invest its profits.
According to an Aug. 12 Wired report, Tether CEO and former chief technology officer Paolo Ardoino explained that the company is now investing its surplus funds into AI and emerging technologies. Tether recently reported $5.2 billion worth of profits for the first half of this year — returns on its $118.5 billion reserve. Ardoino said:
“Tether has become extremely profitable in the last two years thanks to the increase in interest rates. When Tether started, you could make 0.2 percent on the reserve, but today you can make 5.5 percent.”
AI and brain implants: investing in the future
Under Ardoino’s leadership, Tether launched its venture investment division Tether Evo. This spinoff company already invested $200 million in brain-computer interface startup Blackrock Neurotech — the company makes brain-implantable chips that can allow people to control computers and prosthetic arms. The firm’s CEO explained that he holds this sort of technology particularly dear:
“[Brain-computer interfaces] will be fundamental in the future. Building brain-computer interfaces that respect people’s privacy — that ensure data remains local and will not be harvested by the same companies running social media platforms — will be very important.”
Similarly, Tether Evo invested in AI training-focused data center operator Northern Data Group. This company has recently been accused of committing securities fraud, a thing that Ardoino said: “will be evaluated by a court.”
Ardoino addressed the lack of USDT compliance with the European Union’s Markets in Crypto-Assets (MiCA) regulation and absence from the market. He explained that the issue is largely the requirement to hold 60% of assets as cash at banks that only have to comply with fractional reserve banking requirements:
“Say, €10 billion in reserve, you would need to put €6 billion in the bank. The bank can lend out up to 90 percent of that, keeping only €600 million. Imagine a customer asks to redeem €2 billion [worth of stablecoin], but the bank has only €600 million. Then you are in a situation in which both the bank and stablecoin go bankrupt. I don’t think it’s safe.”
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