SoftBank and Ark eye potential backing for Tether in upcoming funding round.

Tether Holdings SA, the issuer of the largest stablecoin globally, is reportedly in preliminary discussions with prominent investors including SoftBank Group Corp. and Ark Investment Management LLC. The talks focus on a funding round estimated to raise between $15 billion and $20 billion, potentially valuing the company at $500 billion.

Potential $500 Billion Valuation

If successful, this fundraising effort would mark Tether’s largest attempt to attract external capital to date, positioning it among the most valuable private companies worldwide. A valuation of $500 billion would surpass many leading global firms, reflecting both the volume of its token issuance and the financial returns generated from its reserves.

As a dollar-pegged stablecoin, Tether’s USDT plays a crucial role in facilitating value transfer within cryptocurrency markets and beyond, allowing investors to transact outside traditional banking systems. The company supports its operations with assets akin to liquid funds, primarily U.S. Treasury bills, and has achieved substantial profits from the interest earned on these reserves.

CEO Paolo Ardoino leads the organization, while co-founder Giancarlo Devasini serves as chairman and remains its major shareholder. According to Bloomberg, a $500 billion valuation could see Devasini’s personal stake valued at nearly $224 billion.

Strategic Support from SoftBank and Ark

Tokyo-based SoftBank, headed by founder Masayoshi Son, is known for its ambitious tech investments in areas ranging from autonomous vehicles to artificial intelligence. Its potential investment in Tether aligns with its strategy to pursue disruptive opportunities, including an anticipated $30 billion investment in OpenAI.

Ark Investment Management, led by Cathie Wood, has also expressed a strong interest in digital assets and has previously invested in Circle Internet Group Inc., Tether’s closest competitor in the stablecoin market. Circle’s USD Coin (USDC) currently has a market cap of around $74 billion, compared to Tether’s 173.5 billion tokens issued.

The potential involvement of both SoftBank and Ark could enhance Tether’s efforts to integrate into traditional finance and bolster its political legitimacy, particularly in the U.S., where it has faced scrutiny for its role in facilitating illicit transactions.

Advisory Role and Industry Impact

Cantor Fitzgerald LP, the New York-based investment bank formerly led by current U.S. Secretary of Commerce Howard Lutnick, is advising Tether on its fundraising. The firm also provides custodial services for Tether’s assets, underscoring its pivotal role in the company’s financial dealings.

This fundraising initiative comes as stablecoins gain increasing attention from investors, regulators, and governments. With U.S. authorities preparing for tighter scrutiny of digital assets, securing investment from leading firms could prove vital for Tether’s positioning in global markets.

If discussions progress and funding is secured, Tether’s valuation would not only mark a significant milestone for the company but also signal continued integration of digital assets into traditional finance, shaping the future landscape of financial transactions.