By Federico Maccioni
DUBAI (Reuters) -Cryptocurrency company plans to move its headquarters to El Salvador, its chief executive said, as the founders of the world’s largest stablecoin look to capitalize on the Central American country’s bid to become a hub for cryptocurrency trading .
Tether has become a dominant force in the burgeoning market for stablecoins, which are designed to maintain a constant value by being pegged to traditional currencies and offering users a way to move money between cryptocurrencies without exposure to fluctuations in currency. prices.
CEO Paolo Ardoino told Reuters that Tether would move to El Salvador after the cryptocurrency recently obtained a license there as a digital asset service provider. Ardoino and his fellow Tether managers and co-founders will also move their residences to El Salvador, he said. Previously, the company was incorporated in the British Virgin Islands.
“This move to El Salvador will be the first time that we will also have a physical headquarters,” he said. But not all of the company’s more than 100 employees will relocate there, he said, adding that many staff are working remotely.
The company plans to hire 100 Salvadorans in the coming years, he said.
The burgeoning stablecoin market has concerned regulators, concerned that growing reserves of stablecoins expose the broader financial system to greater risks, because they act as a bridge between the crypto universe and major financial markets.
Tether has faced questions about its reserves and does not fully disclose where or how they are held. The firm says the vast majority of its stablecoin is backed by traditional currency reserves held at Wall Street brokerage Cantor Fitzgerald, whose CEO Howard Lutnick has been nominated to head the U.S. Department of Commerce under President elected Donald Trump.
“So we have some liquidity in other banks, but the vast majority of Treasuries are in Cantor,” Ardoino said.
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The company said last year that it was increasing monitoring of how its tokens are used to combat illicit finance.
When asked if Tether had considered alternative locations for its headquarters, Ardoino said it lacked a license to operate in the European Union and had ruled out the United States for now. It was “pretty premature” to predict possible changes that could be implemented under Trump, he said.
Trump’s victory in the US election in November sparked a record rise in cryptocurrency prices. The Republican promised to introduce a friendlier regulatory environment for cryptocurrencies and said he planned to create a strategic reserve of bitcoins in the US.
El Salvador is seeking to become a hub for digital currency trading, and three years ago President Nayib Bukele made it the first country to establish bitcoin as legal tender, along with the dollar.
“Welcome home,” Bukele wrote on social media platform X in response to Tether’s announcement. In a separate post on Monday, Bukele asked Rumble CEO Chris Pavlovski to consider moving the video-sharing platform’s headquarters to El Salvador. Days before, the company announced a cloud services agreement with the Bukele government.
Tether’s eponymous dollar-pegged token (USDT) accounts for roughly two-thirds of the $212 billion in stablecoins in circulation, according to data from CoinGecko.
Data shows that the overall market has grown around 45% over the last year.
