Tether Will Invest in El Salvador Volcano Energy Project

Cryptocurrencies developed on proof-of-work blockchains have become a matter of concern over the past few years. However, many projects are coming together to contain the damage done from these activities. Tether, issuer of USDT stablecoin, is moving at a fast pace in this context. The company has now joined hands with the crypto-friendly nation, El Salvador.

Tether Moving Fast in Sustainable Energy

The country announced in September 2021 that they will use Bitcoin (BTC), the largest cryptocurrency in the market, as legal tender. The stablecoin issuer will pour $1 Billion in the nation’s renewable energy initiative, Volcano Energy. The power produced will be used in BTC mining. Paolo Ardoino, Tether CTO, wrote that “Tether is expanding its energy investments, providing capital, tech expertise and advisory to the new venture Volcano Energy.”

Tether is expanding its energy investments, providing capital, tech expertise and advisory to the new venture Volcano Energy🌋

The potential of El Salvador 🇸🇻 as the global energy and #bitcoin hub is immense and at @Tether_to we’re grateful to be part of this opportunity ❤️… https://t.co/wA3dnlQyjB

— Paolo Ardoino 🍐 (@paoloardoino) June 5, 2023

The carbon footprint of crypto mining operations of PoW crypto is a matter of concern, although it is too small compared to other energy intensive industries. Almost all nations agree upon the adverse effects of unchecked pollution and consumption of non-renewable energy. According to the United Nations (UN), over 70 countries have set carbon neutral or negative goals.

Ethereum, the second largest crypto asset by market capitalization, transitioned their operations on Beacon Chain, their proof-of-stake (PoS) blockchain. The move allegedly lowered greenhouse emissions of the blockchain by over 99%. The community labeled it the biggest incident after Bitcoin’s introduction to the world.

In 2019, El Salvador was producing over 60% of the nation’s energy via imported fossil fuels. Now the nation has turned toward renewable energy to meet decarbonization goals. Last year, the country partnered with the International Renewable Energy Agency (IRENA), an intergovernmental organization focused on energy.

Why Doesn’t This Suffering End?

Just last week, Tether revealed its investment plans in Uruguay to use renewable energy for Bitcoin mining. The country generates 94% of its energy from renewable sources. The company reckons that the nation’s reliable power grid fits the bill of modern industry demands.

Tether’s USDT is by far the biggest stablecoin in the market with 64% dominance. Furthermore, the asset holds over 7% of the global crypto market share in the context of market cap. Recently, its market cap reached an all-time high of $83.6 Billion, and at publication time, the figure stands at $83.3 Billion.

The stablecoin market suffered after the U.S. banking crisis. USDC, a stablecoin issued by peer to peer payments technology company, Circle, lost its peg after the Silicon Valley Bank collapse. The company had over $3 Billion with the bank at that time. Consequently, the asset’s market cap declined drastically.

The crypto market recently witnessed a clampdown from the U.S. financial watchdog, Securities and Exchange Commission (SEC). The move delivered a blow to the sector with several tokens experiencing a downslide. With a hostile regulatory environment in the country, crypto entities are finding it challenging to operate in the nation.

Anurag is working as a fundamental writer for The Coin Republic since 2021. He likes to exercise his curious muscles and research deep into a topic. Though he covers various aspects of the crypto industry, he is quite passionate about the Web3, NFTs, Gaming, and Metaverse, and envisions them as the future of the (digital) economy. A reader & writer at heart, he calls himself an “average guitar player” and a fun footballer.