Tether, the issuer of the USDT stablecoin, is significantly boosting its involvement in the Bitcoin mining sector by providing a substantial debt facility to Northern Data AG, a German-based Bitcoin mining company. This move comes on the heels of Tether’s undisclosed investment in Northern Data in September 2023, aimed at supporting artificial intelligence (AI) initiatives.
Northern Data AG has secured a substantial debt financing facility of 575 million euros ($610 million) from Tether, which will enable them to expand their operations across three key business lines: Taiga Cloud, their artificial intelligence cloud service provider, Ardent Data Centers, and Peak Mining, their mining business.
The primary focus of these investments will be on acquiring additional hardware and expanding Bitcoin mining operations, particularly through the use of liquid-cooling mining technology, as outlined in the announcement.
The debt facility, operating under standard market conditions and unsecured, has a term until January 1, 2030. It should be noted that this debt financing follows Tether’s previous investment in Northern Data, demonstrating their commitment to supporting the growth and development of the company.
Tether has been increasingly involved in Bitcoin mining operations throughout 2023, not only providing financial support but also launching their own mining operations and introducing proprietary mining software.
In a recent Q2 attestation from the accounting firm BDO, Tether reported a significant increase in its excess reserves, totaling $3.3 billion, with an additional $850 million in reserves. Despite previous efforts to reduce stablecoin loans to zero, it was reported that these loans have continued to rise in September 2023.
Tether’s continued involvement in Bitcoin mining and blockchain technology underscores the growing synergy between the stablecoin industry and the cryptocurrency mining sector.