Tether and London-based Fasanara Capital launched StableFund on September 9, a private credit vehicle seeded with $400 million in combined sponsor capital and targeting up to $3 billion in additional institutional funding. The fund marks Tether's expansion beyond cryptocurrency lending into traditional finance asset classes.
Fasanara will manage the portfolio while Tether originate USDT-linked financing opportunities and provide settlement infrastructure. Galaxy Research estimated that Tether controlled approximately 60% of the $23 billion centralized crypto-lending market at the end of June, representing roughly $13.5 billion in outstanding secured loans.
StableFund plans to deploy capital into short-duration, asset-backed loans across a fintech network spanning more than 60 countries, including financing for small and medium-sized businesses, consumers, trade receivables, and supply-chain credit. The fund is structured as an evergreen vehicle, allowing continuous capital raising rather than winding down at a predetermined maturity.
Private Credit Faces Growing Pressures
The timing of StableFund's launch comes as the private credit industry confronts mounting challenges. An August Wall Street Journal analysis found deteriorating loan performance across major fund managers including Ares Management, Blackstone, Blue Owl Capital, and Golub Capital. Defaults at those vehicles reached their highest levels 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.
The Financial Stability Board warned in May that private credit faces vulnerabilities including weaker borrower quality, high leverage, opaque valuations, and growing links between private funds, banks and insurers. The watchdog also highlighted rising defaults and redemption pressure from investors as evidence of borrower stress.
Tether's Risk Profile Remains Unclear
Key details about StableFund's structure and Tether's financial exposure remain undisclosed. The companies described the $400 million anchor as a joint commitment but did not specify how it is divided between sponsors. The announcement does not clarify whether USDT will serve as loan principal, collateral, or the fund's denomination, nor does it establish Tether's underwriting authority or how losses would be allocated between sponsors and institutional investors.
Tether's operational role extends beyond providing a settlement token, giving it responsibility for sourcing financing opportunities through its stablecoin network. However, Fasanara retains primary investment management authority for portfolio deployment.
