Tether, the stablecoin firm responsible for the USDt (USDT) dollar-pegged token, is exploring options to tokenize investor equity and implement share buybacks to provide liquidity for investors while aiming for a $500 billion valuation.
According to a report from Bloomberg on Friday, a source familiar with the situation disclosed that Tether recently intervened to prevent an existing shareholder from offloading their stake, as the company is in discussions to secure $20 billion for a 3% share in the issuer business of the stablecoin.
The investor intended to sell a $1 billion share, which would value Tether at $280 billion, the Bloomberg report stated. In light of this, Tether aims to enhance investor liquidity via tokenization or share buybacks once the funding round concludes.
Cointelegraph contacted Tether but had not received any response by the time of publication.
Tokenizing a company’s equity can enhance liquidity by facilitating easier share transfers, fractional ownership, and collateral borrowing. On-chain equity enables holders to retain their positions while using a tokenized form of their equity as collateral in decentralized finance (DeFi) applications.
Related: Tether solvency fears are ‘misplaced’ as company sits on large surplus: CoinShares
Tokenized finance is gaining momentum as US regulators move to reform outdated financial technology
On Thursday, the US Securities and Exchange Commission (SEC) authorized the Depository Trust and Clearing Corporation (DTCC), a settlement and clearing entity, to tokenize stocks, bonds, and exchange-traded funds.
“US financial markets are on the brink of transitioning to on-chain systems,” SEC Chair Paul Atkins stated on Thursday, noting, “On-chain markets will provide enhanced predictability, transparency, and efficiency for investors.”
The financial services firm J.P. Morgan facilitated a $50 million tokenized bond issuance for crypto investment company Galaxy Digital Holdings on the same day as Atkins’ announcement.
Cryptocurrency exchanges are also seeking to broaden trading in tokenized offerings, following the SEC’s approval of the DTCC and Atkins’ statements.
Coinbase, a US-based crypto exchange, is anticipated to unveil its expansion into tokenized stocks and prediction markets as soon as Wednesday.
The company informed Cointelegraph it will hold a livestream event to showcase new offerings, although it did not clarify which products would be revealed.
Tokenized public stocks are still in the nascent stages of adoption, with approximately $700 million in public equities having been tokenized at the time of writing, based on data from RWA.xyz.
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