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USDT stablecoin issuer Tether has announced its foray into Bitcoin mining and plans to set up Bitcoin mining operations in Uruguay using renewable energy.
The announcement comes on the heels of the stablecoin issuer stating that it would begin to purchase Bitcoin at regular intervals using its profits.
Tether’s Foray Into Mining
The company announced that it would soon begin mining operations in the country and has entered into a partnership with a local licensed company. However, Tether has not shared the name or any other details regarding the local entity. The news about the company’s entry into the mining space comes soon after it announced that it would invest around 15% of its profits into purchasing Bitcoin in an effort to strengthen its reserves, similar to strategies adopted by Tesla and MicroStrategy. The announcement also indicates that Tether is bullish about the prospects of the world’s largest cryptocurrency. CTO of Tether Paolo Ardonio stated in the announcement,
“By harnessing the power of Bitcoin and Uruguay’s renewable energy capabilities, Tether is leading the way in sustainable and responsible Bitcoin mining. Our unwavering commitment to renewable energy ensures that every Bitcoin we mine leaves a minimal ecological footprint while upholding the security and integrity of the Bitcoin network.”
Tether also added that it is on the lookout for experts to help the company expand its footprint in the renewable energy space. Bitcoin mining is extremely energy intensive and relies on a distributed global network of computers to verify transactions and release new Bitcoin tokens into circulation.
Is Uruguay The Ideal Location?
Tether also shared its reasoning behind choosing Uruguay to set up its Bitcoin mining operations. In its announcement, Tether stated that the South American country had emerged as a major global leader in renewable energy. In fact, the country has generated 94% of its electricity from renewable sources such as solar power and wind energy. Tether stated in its announcement,
“Blessed with abundant natural resources, Uruguay offers ideal conditions for the production of renewable energy, facilitating the establishment of wind farms, solar parks, and hydropower projects, guaranteeing a consistent supply of clean and environmentally friendly energy.”
Tether is also looking to hire people in various roles in its new Bitcoin mining and energy venture and plans to expand its Bitcoin mining operations to several other countries.
Tether’s Controversial Past
Tether is the entity that issues the USDT, which is the largest stablecoin in the crypto market, with a circulating supply of 83,184,323,408 USDT. It competes with other major stablecoins in the market, such as Binance’s BUSD and Circle’s USDC stablecoins. According to Tether, each of its USDT stablecoins is backed in a 1:1 ratio by US-denominated assets held in reserve. However, the company has gotten into trouble with regulators, with several questions raised about the integrity of the assets backing the stablecoin.
Previously, Tether held all its reserve assets in the form of reserve paper, which is a less liquid form of corporate debt. However, the company has since replaced all the commercial paper held by it with US Treasuries.
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