Tether, the stablecoin firm behind the USDt (USDT) dollar-pegged token, is exploring options for tokenizing investor equity and conducting share buybacks to enhance liquidity for investors, all while aiming for a $500 billion valuation.
According to a Bloomberg report from Friday, a source familiar with the situation revealed that Tether recently prevented an existing shareholder from selling their stake as it engages in discussions to secure $20 billion for a 3% share of the stablecoin issuer’s business.
The investor attempted to sell a $1 billion stake, valuing Tether at $280 billion, as reported by Bloomberg. Tether is planning to provide liquidity for investors through tokenization or share buybacks once this funding round concludes.
Cointelegraph reached out to Tether but had not received a reply by the time of publication.
Tokenizing equity can enhance liquidity by simplifying the transfer, fractionalization, and borrowing against shares. Onchain equity enables holders to maintain their stake while utilizing a tokenized version of their equity as collateral in decentralized finance (DeFi) applications.
Related: Concerns over Tether’s solvency are ‘misplaced’ as the company maintains a significant surplus: CoinShares
Tokenized finance is gaining traction as US regulators revamp legacy financial technology
On Thursday, the US Securities and Exchange Commission (SEC) approved the Depository Trust and Clearing Corporation (DTCC) to tokenize stocks, ETFs, and bonds.
“US financial markets are set to transition onchain,” SEC Chair Paul Atkins stated on Thursday, further noting, “Onchain markets will deliver enhanced predictability, transparency, and efficiency for investors.”
On the same day as Atkins’ announcement, J.P. Morgan assisted with a $50 million tokenized bond issuance for crypto investment firm Galaxy Digital Holdings.
Crypto exchanges are also looking to broaden their trading of tokenized products, following the SEC’s approval of the DTCC and Atkins’ remarks.
Coinbase, based in the US, is expected to announce its entry into tokenized stocks and prediction markets as soon as Wednesday.
The company informed Cointelegraph that it will host a livestream to introduce new products but did not specify what those products would be.
Tokenized public stocks are still in the nascent stage, with approximately $700 million in public equities tokenized as of this writing, based on data from RWA.xyz.
Magazine: Bitcoin whale Metaplanet ‘underwater’ but seeking more BTC: Asia Express
