Tether, the company behind the $137 billion stablecoin USDT, announced plans to establish its headquarters in El Salvador, further cementing the country’s position as a global cryptocurrency hub. The decision follows Tether’s successful acquisition of regulatory approval to operate as a stablecoin issuer in the nation, the company confirmed on January 13.
This strategic move will see Tether relocate key incorporated subsidiaries to El Salvador and open its first physical headquarters, according to a company spokesperson. Previously, most of Tether’s operations were managed through entities incorporated and licensed in the British Virgin Islands. The relocation will not impact its existing presence in Lugano, Switzerland, a source familiar with the matter told CoinDesk.
Regulatory Milestone and Strategic Investment
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 in August 2024. The licenses, issued by the National Commission of Digital Assets in El Salvador (CNAD), enable the company to conduct a wide range of crypto-related activities in the country.
“This decision is a natural progression for Tether, allowing us to build a new home, foster collaboration, and strengthen our focus on emerging markets,” said Tether CEO Paolo Ardoino. “El Salvador represents a beacon of innovation in the digital assets space.”
El Salvador’s supportive stance on cryptocurrency regulation has made it an attractive destination for crypto firms. Under the country’s new ICT Innovation Law, technology companies enjoy a 15-year exemption from income, property, and capital gains taxes, a significant incentive for businesses like Tether.
“The relocation leverages El Salvador’s forward-thinking policies, offering Tether significant advantages, including favorable tax benefits,” noted Matthew Sigel, head of digital asset research at investment firm VanEck.
Boosting El Salvador’s Crypto Economy
Tether’s move is a major development for El Salvador, a nation of over six million residents, as it aims to establish itself as a cryptocurrency hub. Tether’s reported $7.7 billion in net profits during the first three quarters of 2024 equates to approximately 20% of El Salvador’s annual GDP, according to IMF data.
The nation has already made waves in the crypto space under President Nayib Bukele. In 2021, it became the first country to adopt Bitcoin (BTC) as legal tender, and its digital asset regulations have since attracted numerous crypto firms. El Salvador also holds over 6,000 BTC, valued at approximately $550 million, according to Arkham data.
Tether’s USDT stablecoin is the largest in the market and widely used for payments and remittances in emerging economies, making its expanded operations in El Salvador a strategic win for both the company and the country.
Collaborative Ventures and Future Prospects
The announcement comes on the heels of other significant developments in El Salvador’s crypto landscape. Rumble (RUM), a video-sharing platform in which Tether invested $775 million, signed a cloud services agreement with the Salvadoran government, further illustrating the country’s deepening ties with the digital economy.
As El Salvador continues to embrace cryptocurrency, Tether’s headquarters marks a pivotal step in the nation’s evolution as a global leader in digital asset innovation.
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