Tether, the issuer of the world’s largest stablecoin, is seriously considering the tokenization of Tether stock as a strategy to provide liquidity to its investors. This maneuver arises after blocking attempts to sell stakes in the secondary market, while the company seeks to raise $20 billion with a projected valuation of $500 billion. A spokesperson for the firm described unauthorized sales attempts as “reckless,” underscoring the need to follow formal processes.
The private company’s leadership is weighing tokenized representations of its shares or traditional buybacks as main avenues to facilitate orderly capital exits. The goal is to avoid discounted sales that could damage the massive valuation they currently aspire to in their funding round. According to reports, a shareholder attempted to liquidate more than $1 billion in stock at a valuation of $280 billion, a figure significantly lower than the corporate target.
Faced with this situation, management intervened quickly to stop the transaction, fearing that a lower reference price would hamper their global fundraising efforts. The company insists that any movement outside the established channels by Tier 1 global investment banks is a reckless action. In this way, they seek to maintain tight control over the narrative of their market value, which would put them on par with tech giants like OpenAI or SpaceX.
Will Tether manage to redefine corporate liquidity using blockchain technology?
On the other hand, the need for liquidity for early investors is a common challenge in high-growth private companies that delay their IPO. The tokenization of Tether stock would allow for more fluid and transparent secondary trading, leveraging the same technology that underpins its flagship product, USDT. This innovative solution could transform how large private companies manage their capital, eliminating the friction of traditional and centralized secondary markets.
Likewise, the competitive context is relevant, as its closest rival, Circle, went public in June with a much more modest valuation of $6.9 billion. While Circle opted for the traditional route of public markets, Tether appears to be betting on maintaining its private status but with cutting-edge financial tools. The disparity in valuations reflects Tether’s absolute dominance in the stablecoin market, where its reserves have grown by $46 billion over the past year.
Could this move accelerate institutional adoption of tokenized assets?
However, the implementation of tokenized shares is not without regulatory and technical challenges that the company will have to navigate carefully. If they manage to execute this plan, they would validate the use of blockchain for corporate equity management at an unprecedented scale. This would send a powerful signal to Wall Street regarding the viability and efficiency of decentralized infrastructures to handle traditional securities.
Finally, Tether’s strategy goes beyond finance, diversifying its revenue into sectors such as biotechnology and humanoid robotics. With potential investors of the caliber of SoftBank and Ark Investment Management on the horizon, the company’s future seems to be in aggressive expansion. The firm’s ability to innovate in its capital structure will define its position not only in crypto but in the global economy over the next decade.
