USDT stablecoin issuer Tether Holdings has announced plans to relocate its corporate headquarters and subsidiaries to El Salvador. This could be a major achievement for the country, which has long wanted to become a global center for Bitcoin and cryptocurrency-related businesses. The decision comes after the company received a digital asset service provider license from the El Salvadoran government, Bloomberg reports.
Tether, which manages over $137 billion in reserve assets, was previously registered in the British Virgin Islands. The move is seen as a natural evolution of Tether's longstanding relationship with El Salvador, which in 2021 became the first country in the world to make Bitcoin legal tender.
Tether is the issuer of the USDT stablecoin, a crypto asset pegged to the US dollar through a reserve consisting primarily of cash and cash equivalent assets, including US government debt. The growth of the cryptocurrency market in 2024 and interest rates have led to the company's quarterly profits in the billions.
The move to El Salvador comes amid legal challenges for Tether in the United States. In 2021, the company agreed to pay $41 million to settle claims by US regulators who accused it of providing false information about reserves. Part of Tether's reserves are managed by Cantor Fitzgerald LP, whose CEO Howard Latnick will be part of President-elect Donald Trump's administration.
Although Tether has not specified whether it will open a physical office in El Salvador, the move is likely to strengthen the company's ties to the country. It remains to be seen whether the decision will affect the parent company iFinex Inc. or its subsidiary Bitfinex Technology Ltd. or whether it will continue to operate in the British Virgin Islands.
El Salvador's President Naib Buchele has implemented significant reforms in the country, dismantling criminal gangs and amassing a Bitcoin portfolio worth over $600 million. In December, the country reached an agreement with the International Monetary Fund (IMF) on a $1.4 billion loan after four years of negotiations, despite the IMF's initial skepticism about the country's Bitcoin experiment.
Tether is also actively involved in Bitcoin projects in El Salvador. According to Arkham Intelligence, the company owns more than $7.7 billion worth of Bitcoin and organizes Bitcoin conferences in Lugano, Switzerland, and El Salvador.
El Salvador became the first country in the world to recognize Bitcoin as legal tender three years ago. In 2019, an anonymous donor supported an initiative to turn El Zonte, a surfing village in El Salvador, into Bitcoin Beach, a future center for crypto companies. In 2023, Tether took part in a $1 billion project to create the world's largest Bitcoin mining farm in El Salvador, using volcanic energy to power the facility.
In addition, the government of El Salvador launched the Chivo crypto wallet and cryptomachine infrastructure in 2021, offering locals $30 in Bitcoin for opening a wallet. However, the platform did not achieve significant impact and was closed as part of an agreement with the IMF.