Tether, the crypto behemoth behind the $137 billion stablecoin USDT, has made a significant announcement regarding its future operations. The company has established its headquarters in El Salvador, a nation known for its progressive stance on cryptocurrencies. This development reinforces Tether’s commitment to innovation and emerging markets.
According to the company, all necessary licensing has been acquired to operate as a stablecoin issuer in El Salvador. This strategic relocation marks a notable shift, as Tether will be moving its incorporated subsidiaries from the British Virgin Islands (BVI) to the Central American nation. While this transition is significant, it will not affect Tether’s existing operations in Lugano, Switzerland, a known crypto hub.
Two Tether-related entities—Tether NA El Salvador, S.A. de C.V., and Tether International El Salvador, S.A. de C.V.—secured regulatory approval last August for numerous crypto-related activities, as indicated by the National Commission of Digital Assets in El Salvador (CNAD), the country’s crypto regulatory authority.
CEO Paolo Ardoino stated, “This decision is a natural progression for Tether as it allows us to build a new home, foster collaboration, and strengthen our focus on emerging markets. El Salvador represents a beacon of innovation in the digital assets space.” This sentiment echoes a broader ambition to position the country as a leading hub for cryptocurrency.
The relocation is a monumental stride for El Salvador’s aspirations within the crypto ecosystem. Tether, being one of the largest digital asset companies, reported an impressive $7.7 billion net profit in the first three quarters of 2024—equating to approximately 20% of El Salvador’s annual GDP, as per IMF data.
Beyond enhancing the company’s operational base, this move allows Tether to capitalize on El Salvador’s beneficial tax policies for technology and crypto firms. As cited by Matthew Sigel, head of digital asset research at investment firm VanEck, the “potential relocation leverages El Salvador’s new ICT Innovation Law, which offers 15-year tax exemptions for tech firms on income, property, and capital gains.” This regulatory environment is attractive for businesses looking to flourish in the evolving crypto landscape.
Tether’s USDT remains the largest stablecoin, widely used in payments and remittances within emerging markets. El Salvador, with a population exceeding 6 million, has transformed into a developing crypto hub under President Nayib Bukele’s leadership. The country officially adopted Bitcoin (BTC) as legal tender in 2021, paving the way for comprehensive digital asset regulations that have attracted numerous crypto firms. Notably, El Salvador is also a significant Bitcoin holder, currently possessing over 6,000 BTC valued at approximately $550 million based on recent Arkham data.
In recent developments, Tether has expanded its influence, acquiring a stake in the video-sharing platform Rumble (RUM) for $775 million and establishing a cloud services agreement with the Salvadoran government last week, further embedding itself within the local digital landscape.
