7 months ago
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Tether has constructed mining facilities and renewable energy stations in Uruguay, Paraguay, and El Salvador.
Tether, the company behind the USDT stablecoin, is nearing the completion of its $500 million investment in the Bitcoin mining sector. The move, announced by Tether CEO Paolo Ardoino, is driven by the goal of decentralizing Bitcoin mining operations across multiple jurisdictions.
Constructing a Global Renewable Mining Footprint
Tether has constructed mining facilities and renewable energy stations in Uruguay, Paraguay, and El Salvador. The choice of these countries is strategic, as they offer abundant renewable energy resources. For instance, Uruguay generates an impressive 94% of its electricity from renewable sources, predominantly wind and solar power.
In El Salvador, Tether’s focus has been on building renewable energy stations, starting with solar and wind power, with plans to eventually transition to geothermal energy sources. Ardoino emphasized that the company’s foray into mining is driven by the need to distribute mining power across multiple jurisdictions, reducing the risk of any single region wielding excessive control.
Avoiding Overconcentration in any Single Jurisdiction
The CEO explained the evolution of Bitcoin mining, which initially started in China but has since shifted to the United States following China’s crackdown on the industry in 2021. While the US is more open to mining activities compared to China, Ardoino stressed that it is important to avoid dependence on a single geopolitical jurisdiction for the mining process.
Moreso, he further expressed that local governments in states like Kentucky and Texas have actively attracted mining firms by offering attractive tax rebates and energy deals, contributing to the United States’ emergence as a major mining hub. However, he expressed concern over the concentration of mining power and the potential risks associated with it.
Becoming a Major Player in Bitcoin Mining
A chief executive at Bitcoin mining data and research firm MinerMetrics, Jaran Mellerud, when the company announced its shift, stated that there is a high chance that Tether could become the largest Bitcoin mining company, based on the company’s reputation in the crypto ecosystem and its financial strength.
Tether’s venture into the mining business marks a significant shift from its primary business of issuing the USDT stablecoin, which is pegged at 1:1 to the US dollar. This move aligns with Tether’s interest in becoming one of the world’s top Bitcoin miners, as announced in November last year.
Boosting the Crypto Mining Community
The foray into Bitcoin mining is a positive development for the crypto mining community, which has experienced a series of losses and bankruptcies, such as those of Compute North and Core Scientific. Tether’s investment is expected to boost the Bitcoin mining community and potentially have a ripple effect on the price of BTC as the industry progresses toward the next halving event.
By investing in mining facilities and renewable energy sources across multiple countries, Tether aims to promote decentralization and reduce the risk of any single jurisdiction wielding excessive control over the Bitcoin mining process. “The reason for Tether’s move into mining is decentralization,” said Ardoino.
