Tether Enters $3 Trillion Private-Credit Market with New Fund

Tether is expanding its presence in the private-credit market by launching StableFund, a $400 million fund that will be managed by London-based Fasanara Capital and offer USDT-linked financing opportunities. The move takes Tether beyond its dominance in the crypto lending market, where it controlled around 60% of the $23 billion centralized crypto-lending market at the end of June, to financing businesses and consumers in the real economy.

The private-credit market has been growing rapidly, but defaults have reached five-year highs at major funds such as Ares Management, Blackstone, Blue Owl Capital, and Golub Capital. The Wall Street Journal reported that default rates at these vehicles were their highest since at least 2021, with Blue Owl's default rate rising to 2.8% in the second quarter, its highest in at least five years.

Tether's role in StableFund is significant, as it will act as co-sponsor, originator, and adviser, sourcing opportunities linked to its stablecoin network while supplying on- and off-ramp connectivity and treasury rails. However, the companies involved have not disclosed fund leverage, fees, or whether either sponsor's capital will absorb losses before money raised from third-party institutions.