Tether offers US$610 mln debt financing facility to German Bitcoin miner Northern Data

Tether, the issuer of USDT, the world’s largest stablecoin by market capitalization, entered into a 575 million euro (US$610 million) loan agreement with Northern Data AG, a Bitcoin mining company based in Germany.

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Fast Facts

• The US$610 million debt financing facility from Tether will be used to drive investments across the firm’s three business lines, namely artificial intelligence firm Taiga Cloud, Ardent Data Centers and Peak Mining, the company’s Bitcoin mining subsidiary.

• The funds will also be used to acquire hardware for the Taiga Cloud business to expand its offerings as a generative artificial intelligence cloud service provider in Europe, Northern Data announced on Thursday.

• The company also plans to use the investment to further scale its Bitcoin mining operations through its mining subsidiary, Peak Mining.

• The unsecured debt facility’s term ends on Jan. 1, 2030.
• Tether Chief Executive Officer Paolo Ardoino said the loan facility will be covered by the company’s profits and will not be part of its stablecoin consolidated reserves.
• “Tether has been achieving an average of [~1 billion] per quarter in net operating results as reported over the last quarters and the project remains the same going forward, due to the high interest rates on US T-Bills,” Ardoino said in a statement shared with Forkast. “A significant portion of these profits has been prudently retained within our reserves, contributing to the accrual of excess reserves. This strategy has enabled us to overcollateralize our stablecoins by as much as 104%.”

• Tether acquired an undisclosed stake in Northern Data in September, as part of the stablecoin issuer’s move towards artificial intelligence.

• On Tuesday, Tether reported US$3.2 billion of excess reserves backing its stablecoins in its third quarter attestation. The stablecoin issuer claimed to have US$86.4 billion in reserves against US$83.2 billion in liabilities.

• Tether’s USDT is the world’s largest stablecoin with a market capitalization of US$84.9 billion, according to CoinMarketCap data. 

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(Update adds statement from Tether CEO Paolo Ardoino)