Tether, the issuer behind the world's largest stablecoin, USDT, is reportedly engaging in its most significant external capital raise to date, attracting potential investment from prominent technology investment firms SoftBank and Ark Invest. This landmark funding initiative, if successful, could profoundly impact Tether's market standing, valuation, and its pursuit of broader mainstream adoption.
A Landmark Funding Initiative
According to recent reports, Tether is in early discussions to secure between $15 billion and $20 billion through a private placement, offering approximately 3% equity. This ambitious fundraising round could potentially value the stablecoin issuer at an astounding $500 billion, positioning it among the most valuable private companies globally. The participation of tech investment giants like SoftBank, known for its extensive portfolio in high-growth technology sectors, and Ark Invest, led by Cathie Wood, would not only inject substantial capital but also provide a powerful endorsement, enhancing Tether's credibility within traditional finance. Cantor Fitzgerald, a major investment bank, is advising Tether on this critical process and already provides custody services for its reserve assets, further solidifying its ties to established financial institutions.
Bolstering Legitimacy and Market Reach
The backing from such high-profile investors is expected to significantly accelerate Tether’s efforts towards mainstream acceptance and solidify its legitimacy in the eyes of traditional financial markets. Tether has been actively working to increase its political acceptance, particularly in the US, recently launching USAT – a US-compliant stablecoin designed to challenge competitors like Circle's USDC. The company has also strategically brought on former crypto advisors to enhance its US strategy. Tether's formidable financial strength, evidenced by its $4.9 billion net income in Q2 and a year-to-date total of $5.7 billion, largely stems from its business model of investing reserves backing USDT in cash-equivalent assets like US Treasuries, earning interest while maintaining its dollar peg. With USDT dominating 63% of the stablecoin market and a supply exceeding $174 billion, this funding round marks a pivotal moment, poised to set new benchmarks for crypto company valuations and attract further traditional finance participation into the burgeoning stablecoin sector.
