Tether: Official stablecoin to be launched in Georgia

It is 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, the Lari. The company announced this on Monday.

"GEL₮ is designed as a digital representation of the Georgian Lari and enables lower transaction costs, near-instantaneous settlement, programmable payments, and more efficient value transfer in digital financial systems," the statement reads. "The initiative is intended to promote cross-border trade, the development of fintech companies, digital payments, and broader access to programmable financial infrastructure throughout Georgia and the region."

It is noteworthy that the stablecoin is not issued solely by the National Bank of Georgia, but by a private company in partnership with a national government. Tether, which relocated its headquarters to El Salvador last year, issues the world's largest stablecoin with USD₮. According to its own figures, this US dollar-pegged stablecoin now has a market capitalization of almost 190 billion US dollars, and its daily trading volume regularly surpasses payment networks like Visa and Mastercard. USD₮ is backed by cash, debt securities, corporate bonds, and other assets in US dollars. Most recently, Tether was on a major gold buying spree, causing quite a stir. Stablecoins are increasingly used for payment processing, remittances, and cross-border transactions. This allows value to be transferred in seconds, whereas settlement through the traditional banking system can take days.

Tether points to legal certainty

Tether provided no details on the nature of the partnership surrounding the GEL₮ stablecoin. However, the company praised Georgia's regulatory framework in its statement, which attracts digital asset companies through legal certainty. "Importantly, Georgia's framework has been designed to be largely compatible with emerging US stablecoin regulation, including the GENIUS Act." This makes Georgia one of the first countries to seek direct regulatory interoperability with the evolving US framework for digital assets.

The Georgian side also expressed praise. "Together with visionary partners like Tether, Georgia is laying the foundation for a more connected, transparent, and digitized financial world," said Georgian Prime Minister Irakli Kobakhidze. And the President of the National Bank of Georgia, Natia Turnava, welcomed the cooperation with Tether as part of a "comprehensive strategy to promote a secure, modern, and internationally oriented digital financial infrastructure."

Further details on the structure, launch, and regulatory implementation of GEL₮ will be announced at a later date, Tether explained.

(akn)