Tether, the prominent cryptocurrency firm behind the USDT stablecoin, has strategically invested in StablR, a European company specializing in euro and U.S. dollar stablecoins, EURR and USDR. This move underscores Tether’s commitment to expanding its influence within the European digital asset market, especially in light of the forthcoming Markets in Crypto Assets (MiCA) regulations set to be implemented by the end of this year.
StablR’s recent acquisition of an Electronic Money Institution (EMI) license in Malta positions it favorably to navigate the evolving regulatory landscape across the European Union. This licensing ensures that StablR’s operations align with EU-wide compliance standards, facilitating the issuance and management of its stablecoins. Tether’s investment not only provides financial backing but also grants StablR access to Tether’s advanced tokenization platform, Hadron. Launched in November 2024, Hadron offers a comprehensive suite of tools designed to streamline compliance procedures, including Know-Your-Customer (KYC) and Anti-Money Laundering (AML) checks, as well as risk management and secondary market monitoring.
The specifics of the investment, including its size and valuation, remain undisclosed. However, a Tether spokesperson has indicated that the company now holds a “significant equity position” in StablR. This strategic partnership reflects Tether’s adaptive approach to the stringent requirements imposed by MiCA regulations. Notably, Tether recently discontinued its own euro-pegged stablecoin, opting instead to support smaller, compliant issuers like StablR and the Netherlands-regulated firm Quantoz.
Paolo Ardoino, Tether’s CEO, has expressed both optimism and caution regarding the new regulatory environment. He views the regulatory advancements as a positive progression but raises concerns about potential systemic risks, particularly within Europe’s already vulnerable banking sector. Tether has been vocal in its critique of MiCA rules, especially those mandating that major stablecoin issuers maintain a substantial portion of their backing assets in bank deposits. Currently, Tether holds over 83% of its USDT reserves in U.S. government bonds, repurchase agreements, and money market funds.
The stablecoin market, valued at approximately $200 billion, continues to experience rapid growth. Stablecoins offer the advantage of price stability by pegging their value to fiat currencies, making them a preferred medium for liquidity in crypto trading. Additionally, they are increasingly utilized for everyday payments and remittances, owing to the efficiency and cost-effectiveness of blockchain-based settlements compared to traditional banking systems. While U.S. dollar-backed stablecoins dominate the market with a near 99% share, euro-denominated stablecoins have seen slower adoption, currently holding a market value of around $400 million.
Tether’s investment in StablR signifies a strategic effort to bolster the European stablecoin ecosystem, fostering innovation and compliance in a region poised for significant regulatory transformation.
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