Tether Chooses El Salvador for New Headquarters
DUBAI, January 13 (Reuters) – Tether, the world’s largest stablecoin firm, plans to move its headquarters to El Salvador, according to the company’s chief executive. This decision marks a significant step for Tether as it aims to leverage El Salvador’s ambitions to become a prominent center for cryptocurrency trading.
Tether CEO Paolo Ardoino revealed that the move follows the recent acquisition of a digital asset service provider license in El Salvador. Ardoino and his co-founders also plan to establish their residences in the Central American country. The company, currently incorporated in the British Virgin Islands, will have its first physical headquarters in El Salvador.
“This move to El Salvador will be the first time we’re going to have also a physical headquarters,” Ardoino stated, though he noted that not all of Tether’s 100+ employees would relocate, as many work remotely. The company has plans to hire 100 Salvadoran employees over the next few years.
Stablecoins, designed to maintain a constant value by being pegged to traditional currencies, have experienced rapid growth, prompting regulatory scrutiny. These digital assets act as bridges between the crypto and traditional financial markets. Regulators are concerned about the risks posed by the increasing reserves backing stablecoins.
Tether has faced questions regarding its reserves. The company maintains that the majority of its stablecoin is backed by traditional currency reserves held with Wall Street brokerage Cantor Fitzgerald. Howard Lutnick, Cantor Fitzgerald’s CEO, has also been nominated to head the U.S. Commerce Department.
“So we have some liquidity on other banks, but the vast, vast majority of the T-Bills are in Cantor,” Ardoino explained.
Increased Token Monitoring
Last year, Tether announced enhanced monitoring to prevent illicit use of its tokens. Ardoino indicated that the company had ruled out the United States as a potential location, and had not yet been licensed to operate in the European Union. He also stated it was “quite premature” to speculate on potential regulatory changes that might be implemented under former President Donald Trump.
Trump’s win in the U.S. election led to a surge in cryptocurrency prices, with the Republican having vowed to introduce a more favorable regulatory environment for crypto. He has also expressed plans to establish a U.S. bitcoin strategic reserve.
El Salvador is actively seeking to become a hub for digital currency trading. In 2021, President Nayib Bukele made the country the first to adopt bitcoin as legal tender, alongside the U.S. dollar. Bukele welcomed Tether’s announcement on social media.
According to CoinGecko data, Tether’s USDT stablecoin accounts for approximately two-thirds of the $212 billion worth of stablecoins in circulation. The overall stablecoin market has grown by about 45% in the past year.
