It’s an unusual project: The cryptocurrency platform Tether, together with the government of Georgia, will introduce the crypto token GEL₮, an official stablecoin pegged to the national currency Lari. The company announced this on Monday.
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“GEL₮ is designed as a digital representation of the Georgian Lari, enabling lower transaction costs, near-instantaneous settlement, programmable payments and more efficient value transfer in digital financial systems,” the statement said. “The initiative aims to promote cross-border trade, the development of fintech companies, digital payments and broader access to programmable financial infrastructure across Georgia and the region.”
What is noteworthy is that the stablecoin is not issued by the Central Bank of Georgia alone, but by a private company in partnership with a national government. Tether, which moved its headquarters to El Salvador last year, issues the world’s largest stablecoin, USD₮. According to its own information, this US dollar-pegged stablecoin now has a market capitalization of almost $190 billion and its daily trading volume regularly exceeds payment networks such as Visa and Mastercard. The USD₮ is backed by cash, bonds, corporate bonds and other assets denominated in US dollars. Recently, Tether was on a major gold purchasing spree and caused quite a stir.
Stablecoins are increasingly being used for payment processing, remittances and cross-border transactions. This means that values can be transferred in seconds, whereas processing via the traditional banking system can take days.
Tether refers to legal certainty
Tether did not provide any information about the nature of the partnership surrounding the GEL₮ stablecoin. However, in its statement, the company praised Georgia’s regulatory framework, which attracts digital asset companies through legal certainty. “Importantly, Georgia’s framework has been designed to be broadly compatible with emerging U.S. stablecoin regulation, including the GENIUS Act.” This would make Georgia among the first countries to seek direct regulatory interoperability with the evolving US digital assets framework.
The Georgian side was also full of praise. “Together with visionary partners like Tether, Georgia is laying the foundation for a more connected, transparent and digitalized financial world,” said Georgian Prime Minister Iraqi Kobakhidze. And the President of the National Bank of Georgia, Natia Turnava, welcomed the collaboration with Tether as part of a “broader strategy to promote a secure, modern and internationally oriented digital financial infrastructure.”
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Further details on the structure, launch and regulatory implementation of GEL₮ will be announced at a later date, Tether said.
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