Tether Takes Its Stablecoin Into Private Credit

Stablecoin issuer Tether and private credit asset manager Fasanara Capital have launched a private credit fund called StableFund, committing $400 million to it.^4,5,6 Alternative Credit Investor put the size at $400 million, or £295.3 million.⁴ CoinMarketCap reported the fund is targeting $3 billion from institutions.³

Fasanara is a London-based asset manager.³ Under the arrangement the USDT issuer will help source lending opportunities and provide stablecoin payment infrastructure for Fasanara’s private credit network.² The Financial Times described the launch as the latest effort by Tether to expand use of its dollar-linked stablecoin USDT, which it called the reserve currency of the digital asset market.¹ USDT is intended to serve as the fund’s settlement backbone rather than simply as an asset it holds.^2,3

Why it matters to investors

The structure sits directly against a regulatory constraint. Tether is building yield infrastructure around the GENIUS Act’s ban on paying interest on stablecoins, and it is not alone in doing so.⁷ As that account put it, regulators banning stablecoin interest “rarely account for the secondary markets that inevitably sprout in the cracks of their legislation.”⁷ The yield the issuer cannot pay directly can be reached through a fund that settles in its token.^2,7

The counterparty concentration is the other feature worth noting. Tether’s USDT and Circle’s USDC together control 85 percent of the $302.9 billion stablecoin market, a level of concentration described as rivalling traditional monopolies.⁸ A fund that uses USDT as its settlement layer inherits that concentration on top of private credit’s own liquidity profile.^3,8

What to watch

The first marker is whether the $3 billion institutional target is met, and on what terms.³ The committed $400 million is capital from the two sponsors rather than outside money, which makes the raise the real test of demand.^4,5

The second is regulatory. The fund is explicitly constructed around the interest ban rather than in defiance of it, which leaves open how supervisors treat yield delivered through a private credit wrapper settled in stablecoins.^2,7 Tether’s stated purpose is to expand USDT usage, so the volume of settlement running through the vehicle is the measure of whether it works.^1,2 Tether has been extending beyond stablecoin issuance into other investments, and this fund is the latest of those moves.^3,6 The third marker is credit quality. Fasanara’s existing private credit network is the origination channel, and Tether’s role is to source opportunities alongside it and to move the money.² Investors underwriting the fund are therefore taking a view on two things at once: the loans Fasanara finds, and the token those loans settle in.^2,8