Stablecoin Issuer Tether to Establish Headquarters in El Salvador, Relocate Units

(Bloomberg) — Stablecoin issuer Tether Holdings Ltd. will move its corporate entity and subsidiaries to El Salvador after securing a digital asset service provider license in the Central American nation. 

Tether, one of crypto’s most significant companies with more than $137 billion in reserve assets under management, has been registered in the British Virgin Islands. The company has a longstanding relationship with the Salvadoran government, assisting in the country’s bid to become a hub for Bitcoin and crypto entrepreneurs.  

“This decision is a natural progression for Tether as it allows us to build a new home, foster collaboration, and strengthen our focus on emerging markets,” Paolo Ardoino, Tether’s chief executive officer, said in statement on Monday. 

Tether is the issuer and operator of the USDT stablecoin, a cryptoasset that relies on a reserve largely made up of cash and cash-equivalent assets like US government debt to maintain a one-to-one value with the US dollar. A major rally in crypto markets in 2024, along with rising interest rates, pushed Tether’s fortunes to new heights, allowing the company to bank billions of dollars in profits each quarter.  

Its reserves are partly managed by Cantor Fitzgerald LP, whose Chief Executive Howard Lutnick is set to serve in President-elect Donald Trump’s next administration. Tether has faced significant legal challenges over the years, including in the US where in 2021 it agreed to pay $41 million to settle allegations that it lied about its reserves. 

Tether did not specify whether it would set up a physical office in El Salvador, if the move would impact Tether’s parent iFinex Inc. or sister crypto exchange Bitfinex Technology Ltd., or if Tether would retain any operations in the British Virgin Islands. A spokesperson didn’t immediately respond to further questions from Bloomberg.

El Salvador, meanwhile, has undergone a major turnaround effort under current President Nayib Bukele. The eradication of criminal gangs on its streets, along with a growing Bitcoin stockpile of more than $600 million, have helped the country back on its feet in recent years. It also reached an agreement with the International Monetary Fund for a $1.4 billion loan in December, following four years of negotiations.

Bitcoin, the world’s most valuable cryptocurrency, has played a key role in both Tether and Bukele’s strategies. Wallets controlled by Tether hold more than $7.7 billion in Bitcoin, according to Arkham Intelligence, and the company organizes a Bitcoin-themed biannual conference series in Lugano, Switzerland and in El Salvador. 

El Salvador was the first country to make Bitcoin legal tender three years ago, in the hope that greater adoption of the cryptocurrency might enrich its economy. In 2019, an anonymous donor helped fund an effort to turn El Salvador’s El Zonte surfing village — known colloquially as “Bitcoin Beach” — into a future hub for crypto businesses. Tether participated in a $1 billion plan to build the world’s largest Bitcoin mining farm in El Salvador in 2023, utilizing the country’s volcanoes as renewable energy to power the project. 

The government also built Chivo, a crypto wallet service and ATM infrastructure, in 2021, gifting locals $30 worth of the cryptocurrency for each wallet opened. The platform failed to have a significant impact, and was shuttered as part of the IMF deal. 

(Updates with additional context on Tether and El Salvador from the eighth paragraph onward)

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