Tether is Moving to El Salvador Citing its Pro-Bitcoin Policies

Tether, the issuer of the world’s largest stablecoin by market capitalization, is relocating from the British Virgin Islands to Bitcoin-friendly El Salvador.

Tether Chief Executive Officer Paolo Ardoino cited El Salvador’s strong official support for Bitcoin, including being the first nation to incorporate Bitcoin into its treasury. The country’s BTC holdings have reached 6,002, worth $552 million at the current price of $92,000.

The move was announced in a Jan. 13 X post by Ardoino. It came following Tether’s acquisition of a digital asset service provider (DASP) license.

Calling El Salvador a “beacon of freedom” as well as a “beacon of innovation” in the digital asset space, Ardoino said El Salvador’s President Nayib Bukele is “an inspiring leader driving the country with love, passion and intelligence.”

The move has been met with some excitement in the crypto community.

“A company in El Salvador is the 18th largest holder of US Treasury bonds,” said Nansen CEO Alex Svanevik on X. “Larger than Germany and Australia.”

Other countries including the U.S. have far larger bitcoin holdings but most of those come from seizures. U.S. Senator Cynthia Lummis has proposed a national bitcoin reserve, and the idea has gotten traction with Republicans including President-elect Donald Trump.

Tiny Bhutan holds more than twice as many bitcoins in its treasury as El Salvador, but those were obtained by mining, not buying them on the open market.

The tether stablecoin, USDT, has a market capitalization of $137 billion, far above Circle’s USDC, the No. 2 stablecoin with a market cap of about $45.7 billion.

“Natural progression”

Ardoino said the move to a new home in Central America was a “natural progression” for Tether, giving it the opportunity to strengthen its focus on emerging markets.

The company said it is trying to grow its efforts in expanding stablecoin adoption in underserved regions where it can be used for remittances.

“Tether relocating to El Salvador seems like one of those events that everyone underestimates today, but later it turns out to be more important than we realized,” Anthony Pompliano, crypto advocate and CEO of investment firm Professional Capital Management said in an X post.

A strong commitment

President Bukele’s support of Bitcoin came in the face of substantial opposition from the International Monetary Fund (IMF), which for several years refused to give the country a $1.4 billion loan it needed to pay off an older bond issue. The IMF only relented after Bukele agreed to make the acceptance of bitcoin by private sector companies voluntary rather than mandatory, and forbid the payment of taxes in bitcoin rather than El Salvador’s national currency, the U.S. dollar.

El Salvador also had to shut down the Chivo wallet, a national project aimed at jumpstarting bitcoin usage by giving every citizen who acquired one $30 in bitcoin.

Bukele’s persistence in supporting Bitcoin was not very popular at home, but his popularity remains sky-high thanks to an aggressive crime-fighting strategy.