Tether, Fasanara launch $400M USDT fund for private credit

Tether and London-based Fasanara Capital launched StableFund on Sept. 9 with a $400 million joint anchor commitment. The vehicle is intended to channel financing linked to Tether’s USDT stablecoin into the roughly $3 trillion private credit market, and the sponsors said the fund may raise up to $3 billion more from institutional investors.

Fasanara will act as investment manager and deploy the portfolio. Tether will serve as co-sponsor, originator and adviser and will provide settlement and treasury infrastructure tied to its USDT network.

StableFund is structured as an evergreen vehicle that can continue raising and deploying capital rather than winding down at a fixed maturity. The sponsors have not disclosed how the initial $400 million is split, nor have they provided details on fund leverage, fee structure or investor redemption terms.

The fund plans to focus on short-duration, asset-backed loans sourced through a fintech network spanning more than 60 countries. Targeted exposures include lending to small and medium-sized businesses, consumer credit, trade receivables and supply-chain finance.

Tether already has a large presence in crypto lending. Research estimates attribute roughly 60% of the $23 billion centralized crypto-lending market to Tether as of the end of June, about $13.5 billion of secured loans outstanding. StableFund expands Tether’s activity from crypto-market lending into financing in broader parts of the real economy using the company’s on- and off-ramps and settlement rails.

The launch comes as loan performance and liquidity have drawn increased attention in private credit. Defaults at several major private-credit vehicles have risen to their highest levels since 2021, and one large manager reported a default rate of 2.8% in the second quarter. Some funds have faced investor redemptions, and a global financial watchdog in May highlighted risks in private credit including weaker borrower quality, high leverage, opaque valuations, payment-in-kind arrangements and links between funds, banks and insurers.

The announcement left several operational details unspecified. The sponsors did not say whether USDT will be used as loan principal, collateral or the fund’s accounting denomination, nor did they state whether sponsor capital would absorb losses before outside investors. How the anchor commitment is split and the fund’s leverage and liquidity mechanics will determine how losses and liquidity pressures are allocated.

Fasanara manages more than $6 billion in assets. The companies described the initial funding and the fund’s strategy but provided limited public detail on investor terms, fee schedules and redemption mechanics as they seek institutional allocations.