The Tether stablecoin issuer, known as USDT, is making a significant move in the world of Bitcoin mining. Tether is providing a major debt facility to Northern Data AG, a German-based BTC mining company. Northern Data AG has successfully secured a debt financing facility of 575 million euros ($610 million) from Tether, which will drive further investments in its businesses.
The purpose of this debt capital is to allow Northern Data Group to invest in its three main business lines: Taiga Cloud, an artificial intelligence cloud service provider, Ardent Data Centers, and Peak Mining, the company’s mining business. The investments will primarily focus on acquiring additional hardware and scaling up Bitcoin mining operations, specifically using liquid-cooling mining technology.
Tether’s debt facility is unsecured and follows standard market conditions. It has a term that extends until January 1, 2030. This move comes after Tether acquired a stake in Northern Data, demonstrating the stablecoin issuer’s commitment to supporting AI initiatives. Tether’s investment in Northern Data was separate from its reserves and had no impact on customer funds.
In 2023, Tether actively entered the Bitcoin mining sector by launching its own mining operations and introducing proprietary mining software. The stablecoin company has been expanding its presence in the industry, with the aim of boosting efficiency and capacity. This latest move further solidifies Tether’s position within the Bitcoin mining realm.
According to Tether’s Q2 attestation from accounting firm BDO, the stablecoin company has increased its excess reserves by $850 million, bringing the total to $3.3 billion. This indicates Tether’s robust financial position and its ability to make substantial investments in the cryptocurrency market.
Despite Tether’s success and growth, concerns have been raised about the company’s stablecoin loans. In September 2023, reports emerged that stablecoin loans had increased, despite efforts from the company to reduce such loans to zero in the previous year. However, Tether remains confident in its ability to manage these loans effectively while continuing to support and invest in the Bitcoin mining sector.
Overall, Tether’s decision to provide a significant debt facility to Northern Data AG demonstrates its confidence in the future of Bitcoin mining. By supporting established mining companies, Tether is helping to drive further innovation and growth in the industry. With its solid financial position and commitment to expanding its presence in the cryptocurrency market, Tether continues to make waves in the world of Bitcoin mining.