El Salvador Welcomes Tether: USDT Completes Key Formalities For Relocation

Tether, the world’s largest stablecoin issuer, announced on Monday its plans to relocate its headquarters to El Salvador. This decision follows the successful acquisition of a Digital Asset Service Provider (DASP) license, a critical milestone in Tether’s ongoing mission to bolster global Bitcoin adoption.

Tether Eyes El Salvador For HQ

In an interview with Reuters, Tether’s CEO, Paolo Ardoino, stated that the company’s management and co-founders would be moving to El Salvador, marking the first time Tether will establish a physical headquarters. Previously, the firm was incorporated in the British Virgin Islands. 

Ardoino emphasized that while the company is taking this significant step, it does not intend to relocate its entire staff of over 100 employees; most of the workforce will continue to operate remotely.

The move comes amid a rapidly growing market for stablecoins, which has raised concerns among regulators about the potential risks these digital assets pose to the broader financial system. 

As outlined by Reuters, stablecoins serve as “a crucial bridge between the cryptocurrency space and traditional financial markets,” and their increasing reserves have caused unease among financial watchdogs.

Tether has faced scrutiny regarding its reserves, particularly regarding transparency about where and in what form they are held. 

Ardoino noted that while the majority of Tether’s stablecoin reserves are backed by traditional currency held with Wall Street brokerage Cantor Fitzgerald, there are some liquidity holdings in other banks. This lack of full disclosure continues to be a point of contention among critics and regulators alike.

The Emerging Crypto Hub 

When asked about the possibility of establishing headquarters in alternative locations, Ardoino mentioned that Tether currently lacks a license to operate within the European Union and has ruled out the United States for the time being. 

Ardoino also indicated that it is “quite premature” to speculate on potential regulatory changes under the next US administration, particularly with regard to former President Donald Trump, who has expressed intentions to create a more favorable regulatory environment for cryptocurrencies.

El Salvador’s interest in becoming a digital currency hub is noteworthy, especially since it was the first country to declare Bitcoin as legal tender, a decision made by President Nayib Bukele three years ago. 

Interestingly, the report highlights that Tether’s dollar-pegged stablecoin, USDT, accounts for approximately two-thirds of the total $212 billion worth of stablecoins in circulation, according to CoinGecko data. 

The overall stablecoin market has expanded by around 45% over the past year, underscoring the increasing demand for these digital assets amid a volatile wave for other cryptocurrencies such as Bitcoin and Ethereum.

Featured image from DALL-E, chart from TradingView.com