According to a report from CoinDesk, Tether, the company behind the popular stablecoin USDT, has announced that it will be establishing its headquarters in El Salvador, a nation known for its friendly stance towards bitcoin. The move comes after Tether obtained all the necessary licensing to operate as a stablecoin issuer in the country.
Tether will be relocating its incorporated subsidiaries to El Salvador and creating its first physical headquarters, a spokesperson for the company stated. Previously, most of Tether’s entities were incorporated and licensed in the British Virgin Islands (BVI), but the move to El Salvador does not affect the company’s presence in Swiss crypto hub Lugano.
Two Tether-related companies, Tether NA El Salvador, S.A. de C.V. and Tether International El Salvador, S.A. de C.V., received regulatory approval last August for most crypto-related activities in the country, according to the public registry of the National Commission of Digital Assets in El Salvador (CNAD).
Tether CEO Paolo Ardoino stated that the decision to relocate to El Salvador was a natural progression for the company and will allow them to build a new home, foster collaboration, and focus on emerging markets. He also noted that El Salvador is a beacon of innovation in the digital assets space.
The move is a significant development for El Salvador’s aspirations as a crypto hub, as Tether is one of the largest digital asset companies, reporting $7.7 billion in net profits for crypto in the first three quarters of 2024. This accounts for roughly 20% of the country’s annual GDP, according to IMF data.
The relocation could also bring significant advantages for Tether, as the country offers tax benefits to attract tech and crypto firms. The “potential relocation leverages El Salvador’s new ICT Innovation Law, which offers a 15-year tax exemption for tech firms on income, property, and capital gains,” said Matthew Sigel, head of digital asset research at investment firm VanEck.
El Salvador, a small country with a population of over 6 million, has become a nascent crypto hub under President Nayib Bukele. The country made headlines when it introduced bitcoin as legal tender in 2021 and created comprehensive digital asset regulations, attracting a range of crypto firms to settle there. It is also a significant holder of bitcoin, currently holding over 6,000 BTC worth about $550 million, according to Arkham data.
In other news, Rumble (RUM), the video-sharing platform in which Tether acquired a stake for $775 million, recently struck a cloud services deal with the Salvadorian government, according to SEO standards. This further solidifies El Salvador’s position as a crypto-friendly nation and highlights its potential to lead the financial revolution in developing countries.
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