By Federico Maccioni
DUBAI (Reuters) – Cryptocurrency firm 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 crypto trading hub.
Tether has emerged as a dominant force in the booming market for stablecoins, which are designed to maintain a constant value by being tied to traditional currencies and offer users a way to move money between cryptocurrencies without exposure to price fluctuations.
CEO Paolo Ardoino told Reuters that Tether would move to El Salvador after the cryptocurrency recently received a license there as a digital asset provider. Ardoino and his co-leaders and co-founders of Tether 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 we will also have a physical headquarters,” he said. But not all of the company’s 100-plus employees will move there, he said, adding that many of the staff work remotely.
The company plans to hire 100 Salvadorans over the next several years, he said.
The booming market for stablecoins has worried regulators, who worry that growing stablecoin reserves expose the broader financial system to greater risks because they act as a bridge between the crypto universe and mainstream financial markets.
Tether has faced questions about its reserves and does not fully disclose where they are held or in what form. The firm says the vast majority of its stablecoin is backed by traditional foreign exchange reserves at Wall Street brokerage Cantor Fitzgerald, whose CEO, Howard Lutnick, has been nominated to lead the US Commerce Department under President-elect Donald Trump.
“So we have some liquidity at other banks, but the vast majority of T-bills are at Cantor,” Ardoino said.
BOOSTER MONITORING OF TOKENS
The company said last year that it was increasing monitoring of how its tokens are used to fight illegal financing.
Asked if Tether had considered alternative locations for its headquarters, Ardoino said it lacked a license to operate in the EU and had ruled out the US for now. It was “quite premature” to predict possible changes that could be implemented under Trump, he said.
Trump’s victory in the US election in November triggered a record rise in cryptocurrency prices. The Republican has promised to introduce a friendlier regulatory environment for crypto and said he planned to create a US bitcoin strategic reserve.
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 alongside 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. A few days earlier, the company announced a cloud service agreement with Bukele’s government.
Tether’s eponymous dollar-pegged token (USDT) accounts for about two-thirds of the $212 billion of stablecoins in circulation, according to CoinGecko data.
The overall market has grown about 45% over the past year, the data shows.
