Tether’s $100M Investment in LatAm Agriculture Firm May Be a Tokenization Play

Tether, issuer of the $118 billion market cap stablecoin USDT, and its latest investment in a Latin American farming giant may not have much in common at first glance, but both companies share ambition in tokenization of real-world assets.

The stablecoin giant invested $100 million to acquire a 9.8% stake in Adecoagro SA (AGRO), a Luxembourg-based agricultural conglomerate that is listed on the New York Stock Exchange, according to an August filing to the U.S. Securities and Exchange Commission.

Adecoagro owns 213,500 hectares of farmland and industrial facilities spread across Argentina, Brazil and Uruguay, with businesses in the crops, rice, dairy and sugarcane segments, according to its website. It produces 2.8 million tons of agricultural products and over 1 million MWh of renewable energy.

Adecoagro also has a minority stake in Agrotoken, an Argentina-based company that focuses on agricultural commodities tokenization. The company invested in the startup in 2021, which “seeks to transform grains into a digital asset, to store or exchange for supplies, services, and other assets,” according to Adecoagro’s annual integrated report.

Agrotoken CEO and co-founder Eduardo Novillo Astrada said in a video posted on LinkedIn that Adecoagro was a founder of Agrotoken and owns a 10% stake in the startup.

“Mariano Bosch, the CEO of Adecoagro, has always supported us,” Novillo Astrada wrote. “He had great vision and understood that what he wanted to do was tokenized land, something we are also working on together with Adecoagro and other major agricultural partners.”

Agrotoken claims to have transacted $70 million in tokenization deals with more than 250 merchants and over 40 grain holders, in addition to having interacted with more than 1,000 farmers and tokenizing 230,000 tonnes.

Together with Bosch, Agrotoken started the development of three stablecoins, SOYA, CORA and WHEA, according to Novillo Astrada, which allow producers to have their own currency represented in grains. “This is a clear message of the connection between blockchain technology and agribusiness.” he said.

Agrotoken has already worked with firms such as Santander, partnering with the Spanish banking giant in 2022 to launch loans collateralized with tokenized commodities in Argentina.

“Tether views land as a crucial asset class, complementing its existing investments in bitcoin and gold,” a Tether spokesperson said in an email to CoinDesk. “Land is inherently scarce, provides long-term yield, and has historically served as a safe haven during periods of geopolitical instability.”

Tether’s ambition to venture into tokenized assets has been well-documented as the company aims to diversify from its highly profitable stablecoin business. The company reported $5.2 billion net profit in the first half of 2024.

Read more: Tether Reorganizes Into 4 Divisions as It Expands Beyond Stablecoins

The company issues the gold-backed stablecoin XAUT, which is the largest tokenized gold offering with a $615 million market capitalization.

CEO Paolo Ardoino outlined plans in April to launch a tokenization platform that would facilitate the creation of digital versions of a range of assets including bonds, stocks, funds and loyalty reward points.

The company also introduced in June a token minting platform called Alloy and a “synthetic” dollar token that users can create by posting XAUT as collateral. The platform “allows users to create collateralized synthetic digital assets and would be part of Tether’s digital assets tokenization platform, launching later this year,” Ardoino said at the time.

Tether also invested in a slew of businesses over the past year, including a sustainable bitcoin mining operation in Uruguay, payment processor in Georgia and cloud computing firm Northern Data.

UPDATE (September 9, 18:50 UTC): Adds statement from Tether.