Tether, the world's largest stablecoin issuer, said on Monday that it would launch an encryption token linked to the local legal currency lari in Georgia and receive support from the Georgian government. This move is seen as the latest signal that the country continues to pursue a pro-cryptocurrency path.
It is rare for this new token to be launched by a private company in partnership with the government. TEDA has not disclosed the specific arrangements for the cooperation between the two parties, nor has it explained whether the "official" stable currency it calls constitutes a class of central bank digital currency.
TEDA said in a statement that the token will serve as a "digital representation" of the Georgian lari, code-named "GELT", and details about its specific structure, issuance rhythm and application scenarios will be announced later. According to the company, GELT aims to promote cross-border trade, promote the development of financial technology and the popularity of digital payments.
TEDA pointed out that the issuance comes after the National Bank of Georgia introduced stablecoin regulatory rules, making the country more attractive to digital asset companies. Georgia, located in the South Caucasus region with a population of approximately 3.7 million, is one of the world's major cryptocurrency mining centers.
In TEDA’s announcement, Georgian Prime Minister Irakli Kobakhidze, Central Bank Governor Nadia Trnava, and Member of Parliament Vakhtang Trnava were all quoted to express support for TEDA and financial innovation in a broader sense, but they did not directly mention the token itself in their speeches.
A government spokesman referred Reuters' inquiries about the specifics of the government's involvement to the lawmakers, but they have not yet responded to written questions. The Central Bank of Georgia has also yet to respond to emailed inquiries about its role in the stablecoin project.
Stablecoins are a type of crypto-assets linked to legal currencies. They are currently mainly used in the field of cryptocurrency transactions. As a medium for turnover between different tokens, they have not yet been widely accepted in daily payments. The Bank for International Settlements has previously warned that privately issued stablecoins could pose a threat to financial stability and monetary sovereignty.
El Salvador-based TEDA said its U.S. dollar-pegged USDT has a circulating scale of nearly $190 billion, making it still the largest stablecoin product on the market. By comparison, its Mexican peso-pegged token has less than $20 million in circulation. Due to sluggish demand, TEDA has previously announced that it will gradually withdraw from stablecoin products linked to offshore RMB.