Tether, the company behind USDT - the largest stablecoin in the world, has just made a strategic move to strengthen its position in the European market. In the context of the upcoming regulations #MiCA (Markets in Crypto-Assets) coming into effect across the EU, Tether decided to invest in StablR, a compliant stablecoin issuer in Malta.
Tether Strategic Reorientation in Europe
Tether recently closed its euro-pegged stablecoin to redirect support for smaller issuers through the Hadron tokenization platform. This is the second time in a month that Tether has invested in stablecoin companies in Europe, after investing in #Quantoz - a regulated issuer in the Netherlands.
StablR, the company receiving investment from Tether, issues two types of stablecoins: EURR (euro-pegged) and USDR (US dollar-pegged). The company has obtained a cryptocurrency organization license in Malta, ensuring full compliance with MiCA regulations.
Tether and StablR: Strategic Partnership
Tether not only provides financial investment but also operational support to #StablR through the Hadron platform. Services include:
• Compliance Management: Support for identity verification (KYC) and anti-money laundering (AML).
• Risk Management: Monitoring secondary market activities.
• Tokenization Tools: Enhancing StablR's ability to issue and manage stablecoins.
Although the details of the investment have not been disclosed, a representative of Tether stated that the company currently holds a 'significant equity stake' in StablR.
Tether and the European Stablecoin Market
Paolo Ardoino, CEO of Tether, commented:
“The stablecoin market in Europe is at a major turning point as regulations have finally caught up with innovation. However, we are concerned about the systemic risks that these regulations may pose, especially in the context of the already vulnerable European banking sector.”
MiCA requires large stablecoin issuers to hold a significant portion of collateral assets in bank accounts. This is where Tether has voiced its opposition, as the company currently holds over 83% of its USDT reserves in US government bonds, repurchase agreements, and money market funds.
The Potential of Stablecoins in Europe
Stablecoins, with stable values pegged to fiat currency, represent a digital asset class worth $200 billion and are rapidly growing. Although the USD accounts for nearly 99% of the global stablecoin market share, euro-pegged stablecoins only reach a value of about $400 million.
Tether's investment in StablR marks an important step in its expansion strategy in the European market, leveraging MiCA regulations to build a stable and compliant stablecoin ecosystem. This also demonstrates the continuous development of the cryptocurrency market, where regulations increasingly shape the direction of businesses.