Tether, the company behind the largest stablecoin USDT, is gearing toward the final phase of its $500 million strategic move into Bitcoin (BTC) mining, said Tether CEO Paolo Ardoino in a recent interview with DL News.Ardoino said that Tether has spent the investment on building mining facilities and power plants in Uruguay, Paraguay and El Salvador as part of the expansion strategy.“In El Salvador, there is a set-up phase,” said Ardoino, “We are first focusing on building renewable energy stations.Starting from solar and wind, and then moving towards geothermal.” Tether Goes Big The latest development comes after Tether’s announcement of the plan in November last year.
The company has an ambitious goal to reach 120 MW by the end of 2023 and 450 MW by the end of 2025, equivalent to 1% of the Bitcoin network hashrate.
Before its public announcement, Tether had already opened a clean energy Bitcoin mining farm in Uruguay in May.
The firm invested $250 million in a capital raising round for a Bitcoin mining farm called Volcano Energy in El Salvador in the following month.
Bitcoin mining is just part of Tether’s mining operations.
The company announced a $420 million investment in mining company Northern Data Group last September.This move also came with the purchase of Nvidia GPU chips, useful for both mining and artificial intelligence applications.By November 2023, Tether solidified its presence in the mining sector by granting an additional $610 million loan to Northern Data Group.This move strengthens the collaborative relationship between the two parties.While Tether expands its footprint in mining, former leaders like Computing North and Core Scientific in the industry faced challenges.These two firms filed for Chapter 11 bankruptcy protection in 2022.
Earlier this year, Core Scientific announced it completed its restructuring.
The announcement comes less than two weeks ahead of the next Bitcoin halving.The event is anticipated to take place between April 20-21.The Bitcoin halving mechanism is designed to create deflationary pressure on the currency.Every four years, or roughly after every 210,000 blocks mined, the reward miners receive for validating blocks is cut in half.This means the upcoming halving will reduce the block reward from 6.25 BTC to just 3.125 BTC.
The days leading to halving are typically unstable times for most Bitcoin miners.While their operating costs remain the same, their main source of income is halved.This particularly hits inefficient mining operations.Decentralization is Motivation Geographical concentration is among the major concerns when it comes to Bitcoin mining.
Mining Bitcoin was previously focused on China; however, in 2021, Chinese authorities imposed a ban on this activity due to environmental concerns.
The government also prohibits cryptocurrency trading activities.Regulatory crackdown in China led to an exodus of miners to the US.In a bid to attract a surge of mining companies to the US, a number of local governments in Kentucky and Texas implemented preferential policies on taxes and mining costs.
While the US is considered more open than China , the fact that a single region having too much power over the Bitcoin’s network isn’t ideal for its decentralization.With the new mining operations, Tether seeks to diversify mining locations.
Apart from mining, AI is also the industry that Tether has been exploring.Last month, the company said it would deepen its focus on AI with the goal of pioneering the development of open-source, multi-modal AI models to set new standards, promote innovation, and scale AI technology.
Tether’s core business activities still revolve around USDT .It is currently the largest stablecoin issuer in the cryptocurrency market, with a total USDT supply surpassing 100 billion, CoinGecko’s data shows..
