Stablecoin giant Tether seeks funding at US$500 billion valuation

Tether Holdings, issuer of the world’s largest stablecoin, is in talks with investors to raise as much as US$20 billion, a deal that could propel the cryptocurrency firm into the highest ranks of the world’s most valuable private companies.

The El Salvador-based company is seeking between US$15 billion and US$20 billion in exchange for a roughly 3 per cent stake through a private placement, according to two people familiar with the matter.

Depending on the stake offered, the deal could value Tether at around US$500 billion, putting it into the same league as OpenAI and Elon Musk’s SpaceX – an extraordinary achievement for the lightly regulated cryptocurrency business – even as rivals multiply and falling US interest rates threaten its windfall earnings.

Tether’s closest direct rival, publicly traded stablecoin issuer Circle Internet Group, was worth about US$30 billion as of Tuesday afternoon.

The fundraising by Tether would involve new equity rather than existing investors selling their stakes, said the people. Cantor Fitzgerald is acting as the lead adviser, they added.