The world of trade finance is witnessing an interesting development: Tether Holdings SA is moving decisively into the realm of commodity trade lending. The stablecoin issuer recently disclosed that it has extended about US $1.5 billion of credit to commodities traders and intends to "dramatically" scale up further.

Traditionally, trade-finance commitments have rested with banks, export-credit agencies (ECAs) and dedicated commodity financiers. Tether's entrance signals two shifts: one, the blurring of boundaries between fintech/crypto-players and conventional trade finance; two, the increasing liquidity available for commodity flows, albeit via non-bank channels.

From a structural standpoint, Tether offers both dollars and its own USDT stablecoin to traders of oil, cotton, wheat and other bulk flows. That means payment and settlement may occur outside standard banking rails or traditional documentary credit frameworks.

For exporters/importers in high-volume sectors, this may represent faster access to cash and less paperwork. Yet it also raises questions about risk, due diligence, jurisdiction and alignment with the rules that underpin trade finance, for example, UCP 600.

One immediate implication: banks may no longer be the only gatekeepers of trade finance liquidity. In competitive markets, exporters might prefer the agility of a crypto-affiliated financier, thereby pressuring banks to streamline operations and re-evaluate their pricing, documentation and digital capability.

On the flip side, the introduction of non-bank players increases the "unknowns", regulatory scrutiny, settlement risk, counterparty identity, sanction exposure and, crucially, the governance of digital assets.

For the broader industry, this shift nudges trade finance further into a new era where digital, tokenised instruments, stablecoins, blockchain or distributed ledger frameworks are no longer fringe but part of mainstream conversations. The question then is whether these innovations reinforce existing trade finance frameworks (documentary credits, guarantees, supply-chain finance) or sideline them entirely in niche segments?

From a risk management perspective, banks and ECAs must now consider how their coverage or risk mitigation tools co-exist with parallel financing channels. Will banks require reassurance about stablecoin-funded flows? Will insurers demand additional disclosure? Will export credit insurance programmes evolve to recognise new settlement mechanisms?

Tether's move into commodity-trade-lending may be a harbinger of structural change. For stakeholders in trade finance, the question becomes less "if we must adapt" and more "how fast and wisely we will do so". The convergence of cryptocurrency, commodity flows and trade financing could yet define the next decade of cross-border trade.

Further information: https://www.bloomberg.com/news/articles/2025-11-14/tether-plans-dramatic-expansion-in-commodity-trade-lending

This article represents the views of the author and not necessarily those of the ICC.