Tether, the company behind the world’s largest stablecoin, USDT, has announced its decision to move its headquarters to El Salvador.
The firm behind the $137 billion USDT aims to take full advantage of the Central American country’s expanding crypto ecosystem, having recently secured a licence as a digital asset service provider.
El Salvador's ambitious vision to become a global hub for cryptocurrency is expected to benefit from this significant move.
Paolo Ardoino, CEO of Tether, confirmed the relocation, stating that the company will establish its first physical headquarters in El Salvador.
The move comes after the firm obtained all the necessary approvals, including the required licence to operate in the country.
Ardoino, who will relocate to El Salvador alongside Tether’s executives and co-founders, stated,
“This move to El Salvador will be the first time we’re going to have also a physical headquarters.”
While not all of Tether’s 100-plus employees will be relocating, many of the staff will continue to work remotely.
Previously incorporated in the British Virgin Islands, Tether also plans to hire 100 Salvadorans in the coming years to contribute to the country's growing digital economy.
El Salvador, which made headlines in 2021 by making Bitcoin legal tender alongside the US dollar, is positioning itself as a beacon for crypto firms worldwide.
With its supportive regulatory environment and focus on innovation, the country has attracted a variety of crypto-related businesses, and Tether’s move only solidifies its ambitions.
President Nayib Bukele welcomed Tether’s decision on social media, writing,
“Welcome home.”
The tax incentives offered by the country, particularly the 15-year tax exemption on income, property, and capital gains under the ICT Innovation Law, make it an appealing destination for tech and crypto companies like Tether.
As the issuer of USDT, which accounts for nearly two-thirds of the $212 billion stablecoin market, Tether has a massive influence in the cryptocurrency space.
Stablecoins like USDT offer users a way to transfer funds across exchanges without being exposed to the volatility typically seen in other cryptocurrencies.
However, despite its dominance, Tether has faced considerable scrutiny over the transparency of its reserves.
The company has repeatedly been questioned about the assets backing USDT, which it claims are primarily held by Cantor Fitzgerald, a Wall Street brokerage.
Tether's credibility has been clouded by its history of legal and regulatory issues.
In 2018, the company was accused of being undercapitalised and failing to back all its issued stablecoins with U.S. dollars.
These concerns were amplified in 2019 when Tether settled a case with the U.S. Commodity Futures Trading Commission (CFTC) for misleading statements about its reserves.
In 2021, the New York Attorney General’s office revealed that Tether had made false claims regarding its reserves, resulting in a settlement and a promise to provide greater transparency moving forward.
In addition, Tether has been linked to various illegal activities in the past.
A 2021 Chainalysis report revealed that over $3.5 billion worth of Tether was involved in illicit transactions in 2020, though the majority of its transactions were legal.
Tether’s decision to move its headquarters is a major step in El Salvador’s efforts to establish itself as a key player in the digital assets market.
The country, with a population of just over 6 million, has seen a sharp rise in interest from crypto businesses since President Bukele's landmark decision to adopt Bitcoin as legal tender in 2021.
With Tether joining the ranks of other crypto firms flocking to the country, El Salvador’s reputation as a crypto-friendly nation is rapidly gaining strength.
The latest move also ties into El Salvador’s broader efforts to attract high-tech and crypto companies, with the ICT Innovation Law offering the country a distinct competitive edge in the global market for digital assets.
Tether’s first three quarters of 2024 have seen a reported $7.7 billion in net profits from crypto activities, making up about 20% of El Salvador’s annual GDP.
This could be a massive boost to the local economy, particularly with Tether planning to establish operations in the country.
For Tether, moving to El Salvador offers both a strategic and financial benefit.
The company is expected to benefit from the nation’s favourable tax policies while continuing to grow its influence in the global crypto market.
The collaboration between El Salvador and major crypto players like Tether is expected to continue fostering innovation and development within the digital asset space.
El Salvador’s crypto-friendly approach is also attracting other tech firms.
On 14 January 2025, President Bukele publicly invited Chris Pavlovski, CEO of Rumble, to consider moving the platform’s headquarters to the country.
Last Saturday, Rumble announced that it has entered into a cloud services agreement with the Government of El Salvador, providing services such as cloud storage, computing, and databases.
Tether’s move to El Salvador does not affect its operations in other regions, including its existing presence in Lugano, Switzerland, a known crypto hub.
By choosing El Salvador as its new home, Tether is aligning with the country's push to become a hub for cryptocurrency and blockchain technology, further solidifying its role in the global digital economy.
Tether purchased $33.1 billion in U.S. Treasury securities, becoming the seventh-largest holder of U.S. government debt. This move strengthens the stability of its USDT stablecoin and highlights its growing role in both digital and traditional finance.
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