Tether Taps into Private Credit Market with $400M Fund

Tether has launched a $400 million private credit fund in partnership with Fasanara Capital. The fund aims to finance underserved small and mid-sized businesses by providing settlement rails and sourcing USDT-linked opportunities.

The fund is targeting outside investors for up to $3 billion, but so far only half of the structure has moved onchain. This means that while USDT handles payments, the credit exposure remains a traditional fund interest restricted to large institutions.

This highlights an issuance gap in stablecoin credit markets where anyone can hold USDT but few can access the underlying LP interest. The partnership raises questions around future private credit tokenization via structures like ERC-4626 vaults.