Tether Expands Into Private Credit With $400 Million Fund
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Tether, the issuer of the world's largest stablecoin, USDT, is entering the private credit market. Building on profits from managing U.S. Treasurys, the company is expanding beyond media, agriculture and gold into supplying capital directly to businesses, turning itself into a major player in global financial markets. Tether has launched a private credit fund called StableFund with British asset manager Fasanara Capital, according to major foreign media reports on the 12th. The two firms are jointly investing a combined $400 million and plan to raise up to $3 billion more from outside institutional investors. The fund will provide financing to small and mid-sized companies that face relative difficulty raising money in traditional financial markets. Behind Tether's ability to widen its investment reach are the enormous profits generated by its USDT business. Tether places a substantial portion of its reserves in U.S. Treasurys and reverse repurchase agreements, or reverse repos. A reverse repo is a transaction in which cash is lent short term to financial institutions against collateral such as Treasurys and other high-grade securities, in return for interest. The more USDT in circulation, the larger the reserves Tether manages - and the greater the interest income those reserves generate. Tether posted net profit of more than $10 billion last year. As of the end of last...
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