What to know:
- Tether has invested in Malta-licensed stablecoin firm StablR, marking its second investment in a European stablecoin issuer in a month.
- EU-wide digital asset regulations, called MiCA, will enter into force by the end of the year, shaking up the region’s stablecoin market.
- Tether decided last month to shutter its own euro stablecoin and focus on backing smaller issuers through its tokenization platform.
As a seasoned researcher with a knack for deciphering the intricacies of the crypto-verse, I find myself intrigued by Tether’s latest move to invest in StablR. With my years of experience navigating the ever-shifting regulatory landscape, I can see that Tether is smartly positioning itself as a key player in Europe’s burgeoning stablecoin market.
On Tuesday, Tether, the firm responsible for the $140 billion USD-backed cryptocurrency, announced that they have made an investment in the European stablecoin company called StablR.
StablR launched both Euro-backed (EURR) and U.S. Dollar-backed (USDR) stablecoins and secured an Electronic Money Institution (EMI) license in Malta during July, which is essential for adhering to EU-wide regulatory standards.
Tether’s newly revealed tokenization platform, Hadron, will aid StablR in its functions. This includes offering tools for verifying compliance, customer identification (KYC), and anti-money-laundering (AML) procedures, risk assessment, and surveillance of the secondary market.
The firms did not disclose the size of the investment nor the valuation. A Tether spokesperson told CoinDesk that Tether now has a “significant equity position” in StablR.
Tether’s most recent move is part of their strategy to maintain a presence in the EU. They plan to do this by supporting smaller issuers and offering services through their tokenization platform, Hadron. This comes as the European Union’s MiCA regulations are set to take effect later this year. Interestingly, Tether has recently closed down its own euro-pegged stablecoin, but has chosen to invest in Quantoz, a Netherlands-regulated payments firm and stablecoin issuer instead.
In simpler terms, Paolo Ardoino, CEO of Tether, told CoinDesk that the European market for stablecoins is at a critical juncture, as regulations are starting to match the pace of innovation. Tether views this development as progress, but expresses worries about the potential dangers it presents, especially within the already fragile European banking system. Tether has been outspoken against the MiCA rules, which demand that significant stablecoin issuers deposit a substantial portion of their assets in bank deposits. Currently, Tether holds more than 83% of its USDT reserves in U.S. Treasury bonds, repo agreements, and money market funds.
Stablecoins, or cryptocurrencies with steady prices pegged to fiat currencies, are a $200 billion and quickly growing class of digital assets. They are popular as liquidity for crypto trading and are getting increasingly used for everyday payments and remittances due to cheaper and faster settlements using blockchains instead of traditional banking rails. U.S. dollar stablecoins dominate the market with a nearly 99% share, while their euro counterparts lagged in adoption sitting at just about $400 million in market value.
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2024-12-17 16:08