Stablecoins are going from being used as a payment tool into credit markets as Tether moves USDT into private lending through a new $400 million fund.
The world’s largest stablecoin issuer has launched StableFund with London-based digital asset investor Fasanara Capital, with plans to raise up to $3 billion from third-party investors, according to the Financial Times. The firm said the fund will focus on small and medium-sized businesses historically underserved by conventional financing channels.
“Another sign stablecoins are expanding from payments into credit markets,” said crypto journalist Frank Chaparro.
The move comes as Tether looks to grow the use of USDT, whose market capitalisation has reached $183 billion but has remained broadly flat this year. StableFund gives the token a direct role in lending activity, putting stablecoin settlement into a market that has traditionally operated through banks and other financial intermediaries.
Tether Brings USDT Into Private Credit
According to the FT, the fund will deploy capital through Fasanara’s fintech lending network, focusing on short-duration, asset-backed credit. The platform, which manages more than $6 billion in assets, will act as an investment manager and handle sourcing and deal underwriting.
Tether, meanwhile, will find USDT-linked financing opportunities and provide the stablecoin settlement infrastructure, including connections between USDT and other currencies.
That gives the token a role in the financing process itself because private credit can provide the funds as stablecoins facilitate the movement and settlement of capital, creating another source of activity for Tether outside USDT’s established uses in trading, payments and cross-border transfers.
Notably, private credit is facing a difficult period, with lenders writing down loans as defaults rise and investors pull capital from some funds. Reuters reported that the fair value of investments held by 44 US business development companies fell to $92.88 billion by June 2026 from $95.19 billion in cost, while non-accrual loans rose from 2.5% to 3.4%.
The pressure in the sector makes the financing gap StableFund is targeting more important, putting Tether in a position to channel capital toward underserved borrowers while positioning USDT in the lending process.
How It Could Affect USDT Liquidity
Tether estimates the global SME financing gap at $5.7 trillion, while the private credit market is projected to reach $5 trillion by 2029. As capital is deployed through lending, some USDT could end up tied to loans for periods of time instead of remaining immediately available in crypto markets. The effect would depend on where the capital comes from and how much of the fund is ultimately settled in USDT, but the potential change is important for exchange liquidity.
StableFund is targeting up to $3 billion in third-party capital, equivalent to about 1.6% of USDT’s current $183 billion market capitalisation. If part of that capital is obtained from USDT balances that would otherwise be available for trading, liquidity on exchanges could fall. That would matter most during periods of heavy trading, when market makers rely on available USDT to absorb large orders.
Thinner liquidity can increase the price impact of trades, leading to higher slippage and wider bid-ask spreads, particularly in heavily traded pairs such as BTC/USDT. The short duration of the loans means capital can return to the market through repayments and be redeployed, so the effect would be more about where USDT liquidity is sitting at a given time than a permanent reduction in supply.
Fasanara’s lending network spans more than 60 countries, giving the fund an established channel for deploying capital as it scales. If a larger share of USDT begins circulating through that network, Tether could increase the amount of time its token is used in credit markets while reducing the portion that remains immediately available to crypto traders. The result would be a change in the distribution and velocity of USDT liquidity across the wider financial system.
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