Tether, a prominent cryptocurrency entity, has announced plans to establish a bitcoin mining venture in Uruguay, utilising renewable energy sources. The move aims to diversify revenue streams to support Tether’s stablecoin, USDT.
In addition, Tether intends to invest in renewable energy production, marking its initial entry into the energy sector. Moreover, the company is actively seeking professionals in the field to bolster its expansion into renewable energy.
Tether Treasury Management Strategy – Shift towards Bitcoin Investments
Bitcoin mining is known for its high energy consumption, relying on a global network of computers to verify transactions and mint new coins.
Paolo Ardoino, Tether’s Chief Technology Officer, highlighted the company’s commitment to sustainable and responsible bitcoin mining by leveraging Uruguay’s renewable energy capabilities.
Additionally, the objective is to minimise the ecological impact while upholding the security and integrity of the Bitcoin network.
Earlier, Tether revealed its treasury management strategy shift, planning to allocate a portion of its net profit to bitcoin investments, following a trend set by companies like Tesla and MicroStrategy.
As a leading stablecoin, Tether’s USDT boasts a circulating supply exceeding $83.2 billion, competing with Circle’s USD Coin and Binance’s BUSD. Further, stablecoins like USDT facilitate seamless transitions between various cryptocurrencies without the need for fiat currency conversion.
Scrutiny and Response: Tether’s Asset Backing and Transition to U.S. Treasury
Tether asserts that each USDT token in circulation is backed 1-to-1 by equivalent U.S. dollar-denominated assets held in reserve. However, the company has faced scrutiny in the past, with regulators and economists questioning the asset backing its token.
In response, Tether has transitioned from holding most of its assets in commercial paper to solely U.S. Treasuries.
Uruguay is recognised as a front-runner in renewable energy production, with over 98% of its electricity sourced from renewables, primarily wind and hydropower. This is according to the U.S. International Trade Administration.