In brief
- Tether has scaled back plans for a $15-$20 billion raise after investor pushback, with advisers now discussing as little as $5 billion.
- CEO Paolo Ardoino says the company is highly profitable and insiders are reluctant to sell equity, limiting how much could be raised.
- The pullback reflects valuation sensitivity, regulatory uncertainty, and lingering questions around institutional legitimacy, observers told Decrypt.
The world’s largest stablecoin issuer Tether has pulled back from earlier ambitions to raise as much as $20 billion in new funding after encountering investor resistance to its valuation.
It comes roughly two months after Tether explored a raise to the tune of $15-$20 billion that would have placed it among the world’s most valuable private companies. Advisers have since discussed raising as little as $5 billion after pushback from investors, according to a Financial Times report on Wednesday.
Tether CEO Paolo Ardoino reportedly downplayed the earlier figures, characterizing the numbers as a misunderstanding of the company’s intent.
“That number is not our goal. It’s our maximum we were ready to sell,” Ardoino said in an interview cited in the report. “If we were selling zero, we would be very happy as well.”
The fundraising effort has been viewed as a move to strengthen Tether’s credibility and investor relationships, despite the company saying it does not need fresh capital. Tether remains highly profitable and has attracted interest at a $500 billion valuation, Ardoino said.
Ardoino also acknowledged that insiders remain reluctant to sell shares, limiting how much equity could be offered even if investor demand materializes.
Tether issues USDT, a U.S. dollar-pegged token with about $185 billion in circulation that serves as the reserve currency of global crypto markets. The company has said it generated roughly $10 billion in profit last year, largely from interest earned on assets backing USDT, including U.S. Treasuries.
Decrypt has reached out to Tether for comment and will update this piece should they respond.
Legitimacy and credibility
Industry observers say the pullback points to unresolved questions around valuation, regulatory durability, and whether institutional backing can be secured on terms that align with Tether’s broader ambitions.
The decision reflects “broader institutional scrutiny rather than immediate capital needs,” Andrew Gibb, CEO of Twinstake, told Decrypt.
“Investor focus increasingly centers on transparency, governance, and regulatory durability,” Gibb said. “This reflects a wider pattern across digital asset infrastructure, where market position alone is increasingly insufficient to support premium valuations without clear regulatory and operational credibility.”
Given that Ardoino has spoken about Tether’s “plans around energy in developing nations and its AI strategy,” the decision to step back would likely “retain greater flexibility as the company expands into other ventures,” Christian Walker, chairman & co-Founder at stablecoin industry body Stablecoin Standard, told Decrypt.
Walker said Tether could be seen moving “into more and more business sectors in 2026,” with USDT helping serve those prospects.
“Scaling back the raise doesn’t materially change Tether’s position in the market, but it does underline how sensitive investors remain to valuation expectations and regulatory uncertainty,” he added.
Some industry observers highlighted Tether’s framing that it does not need the capital.
“That’s true on paper—Tether is enormously profitable from Treasury yields on $140 billion+ in reserves. But the raise was never really about capital. It was about legitimacy,” Neil Staunton, CEO and co-founder of stablecoin liquidity network Superset, told Decrypt.
Tether’s decision to scale back suggests “they couldn’t get that on terms they liked,” Staunton said. “The irony is that Tether’s profitability is partly a function of the regulatory ambiguity they operate in. A more institutional structure might actually compress those margins.
Not raising “might be the rational choice, but it does leave the legitimacy question unanswered,” he added.
Others point to broader crypto market sentiment as another factor behind the decision.
“In addition to their association with blockchains, Tether’s exposure to recently volatile markets like Gold might have been another driver to this scaling back in investment,” Francesco Mosterts, co-founder of Chainbound and Umia, told Decrypt.
Considering how Tether is “confident on their profits” in crypto, their pullback shows confidence on “the long-term outlook of the ecosystem,” Mosterts added.
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Source: https://decrypt.co/356911/tether-scales-back-20b-funding-push-after-investor-resistance-report
