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With billions in excess reserves, Tether now wants to accelerate its expansion into sectors beyond crypto, a report reveals.

Tether (USDT), the $140 billion stablecoin issuer, is gearing up to expand its investments beyond the crypto space as the firm’s reserves grow, Bloomberg has learned, citing sources close to the firm.

The firm’s financial muscle has been growing, and with $7 billion in excess reserves, Tether is now ramping up investments even further. A person familiar with the firm’s operations, speaking anonymously, explained Tether’s investment strategy might seem “haphazard,” but the firm is aiming to stay ahead of potential risks to its USDT token.

In Europe, Tether is facing challenges as markets adjust to the MiCA regulatory framework. Large crypto exchanges such as Coinbase, Kraken, and Crypto.com have signaled their plans to remove Tether’s USDT from their offerings to comply with the local rules.

Tether follows petro-state model

As crypto.news reported earlier, on-chain data shows Tether’s stablecoin lost more than 1% of its market cap when MiCA regulations came into full effect in late December 2024.

With competition from up-and-coming stablecoins and the possibility of a drop in U.S. interest rates, sources close to Tether compared the firm’s approach to how petro-states like Saudi Arabia use oil wealth to diversify. “It makes sense for Tether to keep branching out,” they said.

Tether has already made investments outside the crypto space. For instance, the stablecoin firm made a $775 million stake in the social media platform Rumble. The firm is also backing European startups, with an investment in StablR, which launched two MiCA-compliant stablecoins, EURR and USDR.