Stablecoin issuer Tether and its investment arm, Tether Investments, have announced plans to allocate over $1 billion to various investment opportunities in the next year. Paolo Ardoino, CEO of USDT stablecoin, shared details of the company’s investment strategies and focus areas in a recent interview with Bloomberg.

Tether is particularly interested in alternative financial infrastructure for emerging markets, artificial intelligence (AI), and biotechnology, with approximately $2 billion invested in these sectors. Most of Tether's reserves, backing USDT, are invested in US Treasury bills and other securities, resulting in significant profits amid the current high-interest-rate environment.

While Tether aims to maintain 100% reserve backing for USDT and set aside an additional 6% cushion from profits, it plans to allocate some remaining profits to investment opportunities. Ardoino highlighted the company’s focus on expanding its distribution network and investing in infrastructure within emerging markets, including over $1 billion allocated to AI initiatives like supporting Northern Data Group.

Tether's profitability has attracted numerous investment proposals globally, although it selectively chooses only a small percentage of these opportunities. Beyond stablecoins, Tether is diversifying into other sectors, such as finance, data, Bitcoin mining and energy, education, and plans to launch a platform allowing companies to issue bonds and equity in digital-token form, as well as enabling central banks to offer central-bank digital currencies (CBDCs).

Ardoino explained that Tether’s investment approach differs from traditional venture capitalists, focusing on projects that align with its strategic vision rather than just short-term profitability targets. Besides AI and emerging markets, Tether is also exploring the biotech sector, investing in companies like Blackrock Neurotech specializing in brain-computer interface technology, even as other players scale back their involvement in the space.