Tether starts lending USDT in commodity markets

Tether Holdings plans a major push into commodities lending. They will use both dollars and their stablecoin USDT to fund traders across oil and agriculture. They expect the business to scale fast as demand for new credit sources grows. Stablecoin use is also rising in many emerging markets, which also helps them reach more borrowers.

Banks retreat from risky regions as Tether steps in

Tether has already deployed about $1.5 billion in credit to traders. This is small compared with global banks, yet it marks a real entry into a long-standing market. Their Trade Finance unit launched last year. It now aims to expand lending tied to oil, cotton, wheat, and other goods.

Using blockchain rails lets them reach regions where banks limit their risk. They say USDT loans offer faster funding and faster settlement, though dollar loans still make up most of the market.

Banks have pulled back after losses and fraud cases. This has made credit tighter for mid-tier traders. It has also opened space for private lenders that charge higher rates to offset risk. Tether likes short-term commodities loans because the goods move quickly and they earn interest more often.

Stablecoin demand is growing, and Tether remains the top player

Tether’s move comes as global use of digital assets rises. Dollar-linked tokens now see wider use in payments and remittances. Recent U.S. rules have also helped adoption.

About $184 billion in USDT is in circulation. This gives them strong interest income from their reserves, which are heavy in Treasuries. Tether leaders expect about $15 billion in profit for 2025, though their financials remain unaudited.

They are also expanding into precious metals. They recently hired two senior traders from HSBC for their growing gold business. Their gold-backed token is now close to $2.2 billion in market value.

They have also moved into South American agriculture. With plans to invest up to $616 million to raise their stake in Adecoagro SA to 70%.

Crypto lending is starting to replace traditional systems

For investors, the rise of private credit in commodities financing creates both pressure and opportunity for U.S.-listed companies involved in these flows.

Large banks such as JPMorgan (JPM), Citi (C), and Goldman Sachs (GS) have dominated trade finance for decades. Their pullback from riskier regions gives nonbanks room to grow. We view this as mildly negative for traditional lenders. Even if the revenue hit is small, the shift shows their long hold on commodity flows is easing.

Traders with U.S. listings or exposure, such as Archer-Daniels-Midland (ADM) and Bunge (BG), may benefit. Flexible credit can speed up cargo movement and reduce delays. Faster turnover helps margins in volatile grain and oilseed markets.

Yet cheaper and quicker financing may also raise competition among mid-sized players that once struggled to get credit.

For investors watching the link between commodities and stablecoin infrastructure, the message is clear. Digital liquidity is starting to bypass old intermediaries. This will not remake the banking system overnight. But early signs point to steady movement toward new credit rails as stablecoin use grows.