Tether, the issuer of the USDT stablecoin, is exploring the option of tokenizing investor equity and conducting share buybacks to provide liquidity for investors as it aims for a valuation of $500 billion.

Reported by Bloomberg on Friday, the company has halted the sale of a stake from an existing shareholder while it seeks to raise $20 billion for a 3% equity stake in its stablecoin operations. The stake was appraised at $1 billion, suggesting a valuation of $280 billion for Tether.

To offer liquidity post-funding round closure, Tether is contemplating avenues such as tokenization or buybacks.

Tokenization can enhance liquidity, enabling easier transfers and fractional ownership of shares, thus paving the way for decentralized finance (DeFi) applications. Cointelegraph provides insights into this method.

Cointelegraph continues to reach out for comments from Tether but has yet to receive a response.

Tokenized Finance Gaining Traction Amid Regulatory Changes

Recently, US regulators approved the Depository Trust and Clearing Corporation (DTCC) for tokenizing stocks, ETFs, and bonds. SEC Chair Paul Atkins emphasized the benefits, stating, “Onchain markets will deliver higher predictability, transparency, and efficiency for investors.”

In tandem with this announcement, J.P. Morgan facilitated a $50 million tokenized bond issue for Galaxy Digital Holdings. As a result, crypto exchanges are now keen on offering tokenized products, following the SEC’s guidance. Coinbase is set to reveal its expansion into tokenized stocks and prediction markets soon.

Despite these promising developments, tokenized public stocks are different from traditional methods, with nearly $700 million of public equities tokenized as of today, according to data from RWA.xyz.