Tether, the issuer of the largest stablecoin globally, is reportedly considering the tokenization of its equity as part of a significant fundraising initiative aimed at raising up to $20 billion. This strategic move could potentially elevate the company”s valuation to approximately $500 billion, positioning Tether among the giants of the financial world.
The exploration of equity tokenization aligns with Tether”s recent launch of Hadron, a dedicated unit established in late 2024 that focuses on the tokenization of various financial assets, including stocks and commodities. Should Tether proceed with this initiative, it would likely leverage the technological foundations that Hadron has already laid out.
As Tether embarks on this fundraising journey, it has been reported that existing shareholders will not be permitted to sell their shares during this round. Instead, the emphasis will be on attracting new investment capital rather than providing liquidity options for current investors. To address this challenge, Tether”s executives are contemplating various strategies, including traditional buybacks, which would allow the company to repurchase shares post-fundraising.
Tokenized equity could present a viable alternative for investors, enabling them to hold digital assets that represent their stake in Tether. However, no final decisions regarding these liquidity options have been confirmed at this time.
Additionally, Tether has been active in managing secondary sales of its stock. Recently, the company intervened to block a shareholder”s attempt to sell shares at a valuation significantly lower than its targeted $500 billion. This intervention underscores Tether”s commitment to maintaining a stable and controlled valuation throughout its upcoming fundraising efforts.
The consideration of equity tokenization comes at a time when the trend of tokenizing traditional financial assets is gaining traction. Although the overall market for tokenized assets remains relatively small, currently valued at around $18 billion, Tether”s involvement could serve to invigorate interest in this sector and create new liquidity pathways within private equity markets.
As Tether continues to explore innovative financial strategies, the implications of its potential equity tokenization could set a precedent for other companies in the space, marking a significant step forward in the evolution of how equity can be represented and traded in the digital age.
