The company behind the world’s largest stablecoin, Tether, has made a strategic investment in Zengo, an Israeli self-custody cryptocurrency wallet known for its advanced security architecture. This move underscores Tether’s growing commitment to decentralized asset management solutions at a time when regulatory scrutiny over stablecoins is intensifying globally.
As digital assets become more integrated into mainstream finance, the need for secure, user-controlled storage solutions has never been greater. Tether’s investment in Zengo aligns with its broader mission to empower individuals with full control over their digital wealth while reinforcing trust and transparency across the crypto ecosystem.
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A New Era of Security-First Wallet Technology
Founded in 2019, Zengo has emerged as a leader in non-custodial wallet innovation by eliminating the traditional recovery seed phrase—a common attack vector for hackers. Instead, Zengo uses multi-party computation (MPC) technology, distributing private key ownership between the user’s device and secure cloud servers without ever exposing the full key.
This cutting-edge approach has allowed Zengo to serve over 1.5 million users worldwide without a single reported wallet breach—an impressive track record in an industry frequently targeted by cybercriminals.
With Tether’s backing, Zengo plans to expand its blockchain-agnostic infrastructure and deepen integration with USDT and other Tether-issued tokens across multiple networks, including Ethereum, Tron, and Bitcoin’s Lightning Network. This will enable smoother cross-chain transfers and enhance liquidity for users managing diverse crypto portfolios.
Strengthening Self-Custody in a Regulated Landscape
Tether CEO Paolo Ardoino emphasized that this partnership is part of a larger strategy to build resilient, user-centric financial tools.
“Tether is committed to delivering reliable and secure solutions that put users in control of their digital assets. Our investment in Zengo reflects that vision,” said Ardoino.
As global regulators increasingly focus on stablecoin issuers’ reserve practices and systemic risks, Tether’s push toward self-custody highlights a proactive shift toward decentralization and enhanced security—key pillars for long-term regulatory acceptance.
In fact, recent data from CoinGecko shows that the total stablecoin market cap has surged to $212 billion, with USDT alone accounting for roughly two-thirds of that value. Driven by demand for digital dollars in cross-border payments and crypto trading, stablecoins have grown nearly 45% year-over-year.
However, this growth has also drawn heightened attention from policymakers concerned about financial stability, reserve adequacy, and monetary sovereignty.
Zengo Pro: Advancing User Experience and Protection
The investment will also accelerate the development of Zengo Pro, a premium-tier product offering enhanced features such as:
- Real-time fraud detection and anti-theft protection
- Priority customer support
- Advanced transaction controls
- Multi-account management for both retail and institutional users
“Our goal has always been to make self-custody simple, secure, and accessible,” said Ouriel Ohayon, co-founder and CEO of Zengo. “Stablecoins are foundational to the future of inclusive finance. We’re proud to collaborate with Tether to bring next-generation security to millions more users.”
This collaboration positions Zengo to scale rapidly while maintaining its core focus on privacy and user empowerment—principles that resonate strongly with tech-savvy investors and everyday users alike.
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Tether’s Broader Vision: Beyond Stablecoins
While best known for issuing USDT, Tether has been steadily expanding its footprint across the blockchain economy. From investments in blockchain infrastructure and decentralized identity to green energy initiatives and AI financing, the company is positioning itself as a multifaceted player in Web3 innovation.
Its 2024 annual report revealed $13 billion in profits, highlighting strong demand for its products despite ongoing scrutiny around reserve transparency. Tether maintains that a significant portion of its holdings are managed through Cantor Fitzgerald, a Wall Street brokerage firm whose CEO, Howard Lutnick, was nominated to lead the U.S. Department of Commerce under President-elect Donald Trump.
While political affiliations remain outside the scope of this analysis, the connection underscores the growing intersection between traditional finance and digital asset ecosystems—a space where Tether continues to play a pivotal role.
Why This Matters for Everyday Users
For average crypto holders, the rise of secure self-custody options means greater autonomy and reduced reliance on centralized exchanges—a shift that lowers exposure to platform-specific risks like insolvency or hacking.
Moreover, seamless integration of stablecoins like USDT into MPC-based wallets enables faster, cheaper international transactions without sacrificing control or security.
As adoption grows, especially in emerging markets where banking access is limited, tools like Zengo could become essential gateways to global financial participation.
Frequently Asked Questions (FAQ)
What is self-custody in crypto?
Self-custody means users retain full control over their private keys—the cryptographic credentials needed to access and manage digital assets—without relying on third-party services like exchanges. This reduces counterparty risk and enhances personal financial sovereignty.
How does Zengo eliminate seed phrases?
Zengo uses multi-party computation (MPC) technology to split private key generation between the user’s device and secure remote servers. No single party ever holds the complete key, making it nearly impossible for attackers to compromise funds—even if they gain access to one component.
Why is Tether investing in wallet infrastructure?
Tether aims to strengthen the entire ecosystem around its tokens by promoting secure, decentralized storage. As regulators push for clearer distinctions between custodial and non-custodial services, supporting self-custody aligns with compliance goals and user trust-building.
Is USDT safe to use in self-custody wallets?
Yes. When stored in reputable non-custodial wallets like Zengo, USDT is as secure as the underlying wallet technology. Users maintain full control, but must follow best practices like enabling biometric authentication and keeping software updated.
Can I use Zengo across multiple blockchains?
Absolutely. Zengo supports multi-chain functionality, allowing users to manage USDT and other assets across various networks such as Ethereum, Solana, Bitcoin (via Lightning), and Tron—all within a single interface.
What are the benefits of MPC wallets over hardware wallets?
MPC wallets offer similar security levels to hardware wallets but with greater convenience. They eliminate the risk of losing physical devices or seed phrases, support instant recovery across devices, and often integrate better with mobile apps and DeFi platforms.
Building the Future of Digital Ownership
Tether’s investment in Zengo signals a pivotal shift toward secure, scalable, and user-first infrastructure in the evolving crypto landscape. As stablecoins continue gaining traction in global payments and decentralized finance, ensuring safe access points becomes critical.
By backing innovative projects that prioritize security, usability, and decentralization, Tether is not just protecting its ecosystem—it’s helping shape a more resilient financial future.
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