Why crypto giant Tether bought a South American farming company
NEW YORK (Reuters) -Crypto powerhouse Tether, the world's largest digital assets company, is leveraging its recent acquisition of a South American agricultural firm to make a strategic play for the multi-trillion dollar a year global commodities trade.
The company aims to embed its stablecoin, a digital currency pegged to the U.S. dollar that trades in crypto exchanges, into the core of markets where raw materials are bought and sold, promising to slash cross-border payment costs and times from days to seconds.
New York-listed Adecoagro, a company that produces dairy in Argentina, rice in Uruguay and sugar and ethanol in Brazil, among other products, agreed in April to sell 70% of its shares to Tether in a deal valued at around $600 million.
It is another sign that the quickly-expanding crypto industry is moving into brick-and-mortar businesses, and broadening investments in physical assets.
"The crypto industry is increasingly focused on bridging digital finance with tangible assets," said Joe Sticco, chief executive of Cryptex Finance, a company that created indexes that mirror cryptocurrencies' market caps.
He said that by adding income-generating assets like farmland or food processing plants, Tether could strengthen its balance sheet and provide a hedge against inflation.
Tether's main business segment is USDT, a digital currency backed mostly by U.S. Treasuries. Launched in 2014, USDT has grown sharply in trading volumes amid rising interest in cryptocurrency and token prices.
It is a way to make payments outside of the traditional global financial system. The big difference between USDT and bitcoin or another cryptocurrency like ethereum is that USDT is designed to track the U.S. dollar, the currency dominating global trade.
COMMODITIES TRADING
Tether has issued $143 billion in USDT so far, and it said in its first quarter report that it has $149 billion in reserves, including $120 billion in U.S. Treasuries.
"Tether wants to boost the use of its stablecoin to make cross-border payments, something that I think will grow a lot in financial markets, particularly in commodities markets," said Marcos Viriato, the chief executive of Parfin, a South American company providing technology for transactions with cryptocurrencies.
"If a company in Brazil sells commodities to someone in Bolivia, the payment through conventional channels could take more than three days. With USDT it would take seconds," he said, adding that operation costs would also be much lower.
Parfin has a pilot project with Brazil's third largest bank, Banco Bradesco, where Brazilian commodities exporters sell products to clients abroad who pay with stablecoins. Bradesco then uses Parfin's infrastructure to convert those USDT to local currency, which is deposited in exporters' accounts.
"Tether's investment approach prioritizes companies that expand our distribution network and enhance the real-world utility of stablecoins, with Adecoagro as a prime example," Tether said in response to a Reuters request for information on the deal.
The company said it is evaluating, alongside Adecoagro's management and other industry experts, how stablecoins could enhance efficiency and liquidity in commodity trading.
Tether reported late last year that it had financed a physical crude deal between a major oil company and a commodities trader, which was settled using USDTs, the first time a deal on these terms was done.
Reuters reported earlier this year that Russia was using cryptocurrencies in its oil trade with China and India to skirt Western sanctions. Venezuela has also sought to use digital currencies to trade.
SUGAR TOKEN
Another possible option for Tether as it enters the agriculture world is the so-called tokenization of commodities, said Gracy Chen, chief executive of crypto exchange Bitget.
Tether already has a gold token, which mirrors gold's value and is backed by gold reserves. It could look now into a sugar or corn token, that could be used for hedging or as a collateral in pre-harvest financing, Chen said.
"In effect, they are turning farmland, sugar mills and renewable energy plants into programmable financial instruments," she said.
Tether said that it sees "significant potential in exploring the tokenization of real-world assets, including agricultural commodities," although it stressed that there were no immediate plans to launch a sugar or corn token.
Instead, for now, the crypto company will use its acquisition for a different application. Tether said it will tap renewable energy produced by Adecoagro in its operations in South America, such as the electricity coming from sugarcane mills, to power a bitcoin mining operation.
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles

Yahoo
3 hours ago
- Yahoo
Alicorp SA (LIM:ALICORC1) Q2 2025 Earnings Call Highlights: Strong EBITDA Growth Amid Market ...
Adjusted Gross Profit: PEN782 million, a 13% increase year-over-year. Adjusted EBITDA: PEN450 million, a 22% increase year-over-year. Adjusted EBITDA Margin: Improved by 0.4 percentage points to 15.1%. Consumer Goods Peru Sales Volume: 13% year-over-year increase. Consumer Goods Peru Adjusted EBITDA: Declined 18% to PEN170 million. International Business Adjusted EBITDA: PEN41 million, a 13% increase year-over-year. B2B Business Volume Growth: 27% year-over-year increase. B2B Business Adjusted EBITDA: PEN105 million, a 22% increase year-over-year. Aquafeed Adjusted EBITDA: $40 million, a threefold increase year-over-year. Leverage Ratio: Improved from 2.8x in June 2024 to 1.9x in June 2025. Available Cash Position: PEN1,521 million, an increase of PEN494 million year-over-year. Revenue Growth Guidance for 2025: Between 10% and 12%. Adjusted EBITDA Growth Guidance for 2025: Mid- to high single-digit growth. CapEx Projection for 2025: $70 million. Warning! GuruFocus has detected 8 Warning Signs with LIM:ALICORC1. Release Date: July 25, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Positive Points Alicorp SA (LIM:ALICORC1) successfully issued a PEN1,530 million international bond with a 7.40% coupon, reflecting strong market confidence. The Aquafeed business showed significant growth, contributing PEN88 million to the year-over-year improvement in gross profit. Adjusted EBITDA increased by 22% year-over-year, driven by growth in adjusted gross profit. The company repurchased 44.6 million shares, representing 7.23% of total issued common shares, demonstrating a commitment to shareholder value. Alicorp SA (LIM:ALICORC1) maintained a strong cash position, with available cash covering 1.2x debt maturities over the next 12 months. Negative Points The Consumer Goods Peru unit faced challenges, particularly in the detergents and edible oils categories, leading to a PEN38 million decline in adjusted EBITDA. Bolivia's challenging economic environment and social tensions impacted Alicorp's operations, with currency volatility affecting financial costs. The edible oils category experienced pressure due to rising raw material costs and increased competition from new entrants. The company anticipates challenges in EBITDA growth expectations in the second half of the year due to Bolivia's foreign exchange environment. Intense competition in the detergents market, particularly from Chinese imports, required strategic repricing and adjustments. Q & A Highlights Q: We've noticed that the only business unit showing a slight lag compared to the others is Consumer Goods Peru. What is the current outlook, and how do you expect both markets to evolve? A: The lag is due to increased competition from imported detergents, particularly from China. We have repriced and improved our value brands and core brands to address this. The outlook is positive, with volumes and market share starting to increase. We expect better dynamics for core brands in the coming quarters. - Alvaro Correa, CEO Q: Considering the company's strong cash flow generation, should we expect an increase in the dividend payout for next year? A: Our priority is to maintain financial strength and leverage within a range. While paying more dividends is an option, we are also considering growth opportunities, including the acquisition of Jaboneria Wilson in Ecuador. We aim to maintain our current dividend policy but remain open to discussions about additional dividends. - Alvaro Correa, CEO Q: Can you provide your views about consumer health in Peru and the macro situation in Bolivia? A: In Peru, consumption remains strong, supported by stable employment and economic growth of around 3-3.5%. In Bolivia, the situation is challenging due to upcoming elections, foreign exchange issues, and liquidity constraints. We are managing these challenges with stringent liquidity and foreign exchange management. - Luis Banchero Picasso, VP of Finance and Transformation Q: Could you elaborate on what has triggered the high-end competition in the oils segment in Consumer Goods Peru? A: The competition is due to increased imports of crude oil by smaller local refineries and discounters. Additionally, oil from Bolivia is entering the market. We are managing these challenges by leveraging our production capabilities in Bolivia and adjusting our strategies accordingly. - Alvaro Correa, CEO Q: What is your current strategy for hedging raw materials, and have you taken advantage of current low prices and volatility? A: We maintain a hedging strategy of three to nine months, depending on the commodity. Our approach is to mitigate volatility rather than speculate on commodity prices. We believe this provides a competitive advantage and stability in our cost structure. - Luis Banchero Picasso, VP of Finance and Transformation Q: Are the margins in the Aquafeed business sustainable, and do you plan to invest in increasing production? A: The Aquafeed business is volatile, influenced by shrimp demand and weather conditions. While margins were favorable due to good weather and controlled costs, we expect some pressure in the third quarter. We have spare capacity and will consider further investments based on demand growth. - Alvaro Correa, CEO For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
Yahoo
5 hours ago
- Yahoo
Galan Lithium Limited: Incentive Regime for HMW Project in Argentina
PERTH, Australia, July 28, 2025 /PRNewswire/ -- Galan Lithium Limited (ASX: GLN) ("Galan" or "the Company") is pleased to advise that the Comite Evaluador de Proyectos RIGI, responsible for awarding the Argentine Government's Régimen de Incentivo para Grandes Inversiones (the incentive regime for large-scale investments referred to as the "RIGI"), has approved the RIGI for Galan's flagship Hombre Muerto West ("HMW") Project in Catamarca Province, Argentina. Galan now expects to receive official approvals relating to the RIGI in due course. The RIGI is a landmark investment framework introduced as part of the Government of Argentina's new economic reform agenda, aimed at encouraging large-scale investment in key sectors, including mining. The RIGI provides long-term certainty on tax and foreign exchange regulations, as well as streamlined permitting, both critical enablers for project financing, efficient construction and operation of the HMW Project over its multi-decade life. HMW will be only the sixth project to receive the RIGI approval in Argentina and the second in the mining sector, following the recent award to Rio Tinto's Rincon project. Managing Director, Juan Pablo ("JP") Vargas de la Vega, commented: "This is a major milestone for Galan that will further strengthen HMW's global competitive position as a future low-cost producer. The RIGI will provide a strategic advantage to Galan and will unlock meaningful long-term value for the people of Catamarca and our shareholders. The RIGI delivers fiscal stability and operational certainty over the long-term, key requirements for major project financing and execution. It also signals strong alignment between Galan and the Argentine government's broader vision of accelerating lithium production and economic development. Galan sincerely thanks the Government of Argentina and the Province of Catamarca for endorsing HMW for official approvals under the RIGI which further substantiates HMW as a significant project in Argentina and globally." Key Benefits of the RIGI for the HMW project: Reduced Corporate Income Tax: a significant 10% reduction in corporate income tax rate to 25%. Fiscal Stability: Certainty around income tax, royalties, and export duties for 30 years. Foreign Exchange: Preferential access to currency markets for imports and dividend repatriation. Customs & Tariff Exemptions: Reduced barriers for importing critical equipment and materials. Accelerated Depreciation: Improved cash flow through tax-effective project development. About Hombre Muerto West HMW is a multi-decade, lithium brine project in Argentina with compelling economics. Phase 1 provides for a 4ktpa LCE operation, producing a 6% LiCl concentrate product over a projected 40-year life (1). Galan expects first Phase 1 production in H1 2026 and has secured an offtake agreement for 45,000 t LCE of production. Beyond Phase 1, the Company will undertake a phased scaling approach, eventually ramping up to 60ktpa at the conclusion of Phase 4. This approach mitigates funding and execution risk and will allow for continuous process improvement. With a world class resource and a cost profile within the first quartile globally, HMW is a clear demonstration of the benefits of a high-quality lithium brine asset. These benefits are allowing Galan to progress through development and into production with a lower capital intensity and lower risk profile when compared to hard rock lithium (spodumene) projects. As importantly, lithium chloride is a key component for lithium iron phosphate (LFP) batteries, which have become the dominant battery product globally. With the ability to be cost effectively converted into a lithium dihydrogen phosphate or lithium carbonate, lithium chloride, as will be produced at HMW, is an ideal source for LFP batteries. The Galan Board has authorised this release. Please refer to the Mineral Resource Statement for Galan's Total Resources of 9.5Mt LCE. (1) Please refer to the announcement dated 3 July 2023 (ASX: Phase 1 of Hombre Muerto West (DFS Delivers Compelling Economic Results for Accelerated Production)). The Company confirms that all material assumptions underpinning the production target continue to apply and have not materially changed. For further information contact: COMPANY MEDIA Juan Pablo ("JP") Vargas de la Vega Matt Worner Managing Director VECTOR Advisors jp@ mworner@ + 61 8 9214 2150 +61 429 522 924 About Galan Galan Lithium Limited (ASX: GLN) is an ASX-listed lithium exploration and development business. Galan's flagship assets comprise two world-class lithium brine projects, HMW and Candelas, located on the Hombre Muerto Salar in Argentina, within South America's 'lithium triangle'. Hombre Muerto is proven to host lithium brine deposition of the highest grade and lowest impurity levels within Argentina. It is home to the established El Fenix lithium operation, Sal de Vida (both projects are owned by Rio Tinto following its successful acquisition of Arcadium Lithium). Galan also has exploration licences at Greenbushes South in Western Australia, just south of the Tier 1 Greenbushes Lithium Mine. View original content: SOURCE Galan Lithium Limited Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
5 hours ago
- Yahoo
Weekly Recap: Ethereum's Comeback Summer
It's hard to believe that ETH was languishing at less than $1500 in April. Now it's above $3800 again. Ethereum's comeback is the story of the summer. Through ETFs ($2 billion inflows in two weeks), ETH treasury vehicles and excitement around tokenization, the comeback is well and truly on. And institutions are in the driving seat. One of BlackRock's key digital assets stars will lead Joseph Lubin's ETH vehicle, SharpLink. As EY's Paul Brody wrote this week, with institutions, 'Ethereum Has Already Won,' and will probably keep winning for decades to come. The incumbency of the Network Effect – that a critical mass of transactions in stablecoins and tokenization will fall to Ethereum – makes it a de facto network. We'll see. In markets: While bitcoin held steady under 120k, altcoins did well. Hell. Most of the crypto market is looking relatively healthy these days. And, according to President Trump, Jerome Powell could soon cut rates (or get fired). If so, that will help risky assets like bitcoin et al. In other big news: Roman Storm's Tornado Cash trial intensified. CoinDesk's Cheyenne Ligon was there. Elon signed up X/Grok to prediction market Kalshi JP Morgan will offer crypto loans but faces protests from crypto trade groups over data access. See you next in to access your portfolio