Tether Buys Majority Stake in South American Farmland for $600 Million

Tether, the issuer of the world's largest stablecoin, has made a significant investment in farmland through its $600 million purchase of a majority stake in Adecoagro, an agribusiness operating across Argentina, Brazil, and Uruguay. This move follows a clean audit from KPMG, one of the Big Four accounting firms, but Tether's own reserve buffer has since fallen 40%, raising questions about its scarce-asset hedges.

The addition of farmland to Tether's reserve mix joins gold and Bitcoin (BTC) in what the company sees as a hedge against systemic instability. However, this strategy has been questioned due to the company's reliance on assets that can be difficult to liquidate quickly, such as land and gold.

Tether CEO Paolo Ardoino described the move as part of the same logic driving its gold and Bitcoin positions, a hedge against dollar debasement and inflation. He noted that Tether has become 'probably the largest owner, landowner in South America' through this acquisition, with Adecoagro operating hundreds of thousands of sheep and cattle and producing milk and rice.

Tether's reserve mix also includes US Treasuries, which account for roughly $141 billion of its exposure. However, the company's reliance on these assets has been criticized due to their potential volatility and correlation with the dollar.