Tether Could Postpone Capital Raise Over Insufficient Interest at $500B Price Tag: Sources
A valuation of $500 billion would position Tether above all American banking institutions with the exception of JPMorgan Chase, eclipsing Bank of America and securing its position as one of the planet's most significant financial entities.
Tether is applying pressure on potential investors to make commitments to a capital raise priced at a $500 billion valuation before a two-week window closes, indicating that the fundraising effort could be postponed should interest prove insufficient.
The company, which is based in El Salvador, has been pursuing additional funding since the latter part of last year but has encountered pushback from investors who remain cautious about the proposed valuation, according to a Friday report from The Information that referenced sources who were not identified. Should the level of commitments fail to meet the company's expectations, a postponement of the fundraising round appears probable.
The proposed $500 billion valuation would position Tether alongside the globe's most substantial financial institutions, surpassing all American banks with the sole exception of JPMorgan Chase. JPMorgan, which holds the position of the world's largest banking institution, maintains a market capitalization of approximately $794.55 billion, whereas Bank of America, the nation's second-largest bank, holds a market cap of $352.86 billion.
Tether's USDt (USDT) stablecoin, which stands as the largest stablecoin globally, presently maintains a market cap of $184 billion. Among the company's other leading offerings are Tether Gold (XAUt) and Tether EURt (EURt), which is pegged to the euro.
Tether explores fundraising
During September of the previous year, a Bloomberg report indicated that Tether was considering a fundraising initiative that could reach as high as $20 billion and potentially value the organization at approximately $500 billion. According to the report, the firm was contemplating raising between $15 billion and $20 billion via a private placement in exchange for an estimated 3% ownership stake, with Cantor Fitzgerald serving in the capacity of primary adviser.
In response to the published report, CEO Paolo Ardoino stated on X that the organization was considering a capital raise from a carefully selected group of investors with the intention of expanding throughout "existing and new business lines (stablecoins, distribution ubiquity, AI, commodity trading, energy, communications, media) by several orders of magnitude."
Nevertheless, in a statement provided to Cointelegraph during February, Ardoino refuted reports suggesting the company intended to raise as much as $20 billion, characterizing the previously reported figures as hypothetical scenarios instead of an active fundraising strategy. Despite this, he maintained his support for the $500 billion valuation, drawing comparisons between the company's profitability and that of AI platforms like OpenAI.
Cointelegraph contacted Tether requesting a comment, but had not received a response at the time of publication.
Tether taps KPMG for first full audit of USDt
In related developments, Tether has allegedly engaged KPMG to perform its initial comprehensive audit of USDt's financial statements, with assistance from PwC in preparing the company's internal systems, as reported by the Financial Times. This development arrives after years of depending on reserve attestations provided by BDO Italia instead of undergoing a complete audit.
A comprehensive audit would extend beyond simple reserve snapshots to scrutinize assets, liabilities and internal control mechanisms throughout Tether's entire balance sheet.