Tether Eyes $500B Valuation With Plan to Tokenize Investor Equity
What Prompted Tether to Explore Tokenized Equity?
Tether is evaluating whether to tokenize investor equity and introduce share buybacks as part of a plan to provide liquidity for its shareholders, according to a Bloomberg report citing a source familiar with the discussions. The stablecoin issuer, which manages the USDt token, is seeking a valuation of around $500 billion as it prepares a new funding round.
Bloomberg reported that one existing shareholder attempted to sell a $1 billion stake that implied a valuation of roughly $280 billion. Tether is reportedly in talks to raise $20 billion for a 3% stake, and the company blocked the shareholder from selling while it works through potential liquidity solutions. Options on the table include tokenizing equity or conducting buybacks after the round closes.
Tokenized equity allows shares to move freely onchain while still representing the same underlying ownership. Investors can transfer or fractionalize positions without traditional intermediaries and may also use tokenized shares as collateral in DeFi platforms. For large private companies with limited secondary-market options, tokenization can create liquidity without pursuing a public listing.
Cointelegraph contacted Tether for comment but had not received a response at the time of publication.
Investor Takeaway
Tether’s valuation push shows how private crypto giants are exploring tokenization to unlock investor liquidity without going public. A move into tokenized equity would further blur the line between corporate finance and onchain assets.
Why Is Tokenized Finance Gaining Momentum Now?
Interest in tokenized financial products accelerated this week after the US Securities and Exchange Commission granted approval to the Depository Trust and Clearing Corporation (DTCC) to tokenize stocks, bonds and ETFs. The decision gives the clearinghouse a path to settle traditional financial instruments on blockchain rails.
“US financial markets are poised to move onchain,” SEC Chair Paul Atkins said on Thursday. “Onchain markets will bring greater predictability, transparency, and efficiency for investors.”
The SEC’s action reinforces a broader trend: tokenization is moving from industry pilot programs into early stages of mainstream financial infrastructure. Institutions are already engaging. J.P. Morgan facilitated a $50 million tokenized bond issuance for Galaxy Digital Holdings on the same day as Atkins’ announcement, adding to earlier tokenization pilots run through its blockchain-based settlement networks.
Early adopters argue that onchain settlement can reduce reconciliation work and shorten settlement cycles. For issuers, it may open access to new investor segments by making assets transferable in smaller units. For regulators, the shift raises questions around market structure, custody, and oversight as traditional assets migrate into programmable formats.
How Are Crypto Firms Responding to the SEC's Green Light?
Crypto exchanges are preparing to expand their tokenized product offerings following the DTCC approval. Coinbase is expected to showcase new tokenized stocks and prediction-market products during a livestream scheduled for Wednesday, though it has not confirmed which products will be included. The company told Cointelegraph only that it plans to present new offerings tied to the next stage of its platform.
Exchanges see tokenized assets as an opportunity to combine familiar financial products with the liquidity and programmability of blockchain networks. Retail users have shown interest in fractional stock trading for years; tokenized equities offer another route to achieve the same effect, but with 24/7 transferability and automated settlement.
Still, tokenized stocks remain early in adoption. At the time of writing, public equities worth nearly $700 million have been tokenized, according to RWA.xyz data — a small fraction of global equity markets. Growth has been steady, but concentrated among specialist platforms and institutional pilots rather than mainstream retail flows.
Investor Takeaway
US regulators are opening the door to tokenized stocks and bonds. If adoption broadens, the biggest impact may be on settlement infrastructure — and on private companies exploring onchain equity, such as Tether.
What Comes Next for Tether and Tokenized Equity?
If Tether proceeds with tokenizing equity, it would join a growing group of companies using blockchain rails to manage ownership stakes outside public markets. For investors seeking liquidity in private valuations that have grown sharply, tokenization offers a potential release valve without introducing the disclosure demands of a public listing.
The company’s fundraising target — $20 billion for a 3% stake — places it among the highest-valued private firms globally if achieved. Whether tokenized shares become a core part of that process may depend on legal structure, investor appetite and secondary-market demand for onchain corporate assets.
The broader backdrop is shifting quickly. With regulators giving clearinghouses the go-ahead for tokenized settlement, banks launching tokenized debt, and exchanges preparing new tokenized products, corporate equity may not be far behind. Tether’s move signals that the next wave of tokenization may stretch beyond institutional pilots into ownership of the crypto sector’s largest players.