Tether's new business: helping small nations issue stablecoins

Original Author: Xiaobing, TechFlow

On May 25, stablecoin issuer Tether announced a partnership with the Georgian government to launch GEL₮, a stablecoin pegged to the Lari.

The press release followed a standard formula: reducing costs, accelerating settlements, and facilitating cross-border payments. CEO Ardoino reiterated the familiar statement, stablecoins are becoming the infrastructure of global finance.

Viewed within the context of Tether’s actions over the past 24 months, the company is systematically securing the on-chain issuance interfaces and global distribution channels for small nations' currencies, one by one.

Tether’s Product Line: Essentially a Map of Minting Services

Let's lay out Tether's cards: USDT, with a $189 billion market cap, is number one globally but inaccessible to US users; USAT, launched earlier this year for the GENIUS Act compliant market, acts as USDT's "American counterpart"; EURT, the euro stablecoin, was withdrawn due to MiCA regulations and will stop redemptions in November 2025; MXNT is the Mexican peso; CNHT is the offshore yuan, which has always been small; and now, GEL₮, the upcoming Lari stablecoin.

It looks messy by currency, but the strategic intent is clear. Tether is testing a concept: beyond the main USD track, can "issuing native currency stablecoins for sovereign nations" be turned into a replicable, standardized business?

USDT is responsible for maintaining its position as the global dollar shadow currency. USAT and EURT represent compliance attempts in heavily regulated markets. The remaining ones — MXNT, CNHT, and GEL₮ — share a clear commonality: they target nations with weak currency internationalization, high cross-border payment costs, heavy reliance on remittances, but are not subject to blanket sanctions like Iran or North Korea.

Georgia is the latest model for this strategy.

Why is Georgia Willing to Sign?

With a population of 3.7 million and a GDP of around $35 billion (smaller than Kunming, China), Georgia possesses three conditions making it particularly suitable.

It has pain points. IMF data shows remittances have accounted for about 15% of Georgia's GDP over the past decade, with receiving households generating 40-45% of their monthly income from these inflows. The money primarily comes from Russia, Greece, and the USA. The cost and time delay of each traditional wire transfer represent real losses for these families. If an on-chain Lari works, it's a genuine benefit for the people.

The regulatory framework is ready. The National Bank of Georgia spent years building a digital asset regulatory framework covering reserves, redemption rights, issuer oversight, and AML, and has proactively aligned it with the US GENIUS Act. This step is intentional, aiming to position Georgia as a digital asset hub in the Caucasus region.

Earlier groundwork was laid. Georgia signed an MOU with Tether in 2023, conducted a digital Lari pilot with Ripple the same year, and signed a cooperation agreement with Hedera. GEL₮ wasn't conceived out of thin air.

The logic is straightforward: use Tether's global distribution network in exchange for accelerating the internationalization of its own currency.

Georgia could issue its own CBDC, but even the fastest CBDC only circulates within its own system. By plugging into Tether's network, the Lari can, for the first time, be directly swapped with USDT and USDC in the same liquidity pool and held by any crypto wallet. This essentially means Georgia is using its compliant framework as consideration to rent Tether's already established global pipeline.

What does Tether get?

Georgia is too small. The annual remittance market is less than $5 billion. Combined with domestic payments, the maximum stablecoin circulation volume is a few tens of billions of dollars – a tiny fraction of USDT's $189 billion.

So Tether's aim isn't Georgia itself, but the template.

With every additional country, the solution of "issuing native currency stablecoins for sovereign states" becomes more mature. Once GEL₮'s compliance structure, reserve mechanism, and redemption process are proven successful, the next interested countries – Azerbaijan, Armenia, Uzbekistan, Kenya, Nigeria – can adopt the template directly, compressing implementation time from years to months.

The true moat lies deeper. When a nation's native stablecoin can be swapped within the same liquidity network as USDT, that country's currency is subtly integrated into the informal dollar system anchored by USDT. Tether doesn't need to compete for these central banks' decision-making power; it just needs to ensure it is the intermediary router.

This logic resembles London's financial exports in the 19th century. London banks didn't act as central banks in the colonies; they simply layered clearing, discounting, and exchange systems, compelling everyone to use London's rails. The difference is that it was one-way colonialism then, whereas now it's a two-way voluntary arrangement. Small nations are willing to sign because they can't wait for SWIFT's overhaul; Tether is willing to build, securing a critical position in the next generation of financial infrastructure.

Sovereign Currency Outsourcing

The digital euro has been mired in public consultations for five years, tangled between MiCA, the ECB, and various national central banks.

Georgia, a country with a GDP smaller than Kunming, leveraging a single contract with a private company, bypassed the entire "state-issued CBDC" process and put its currency directly on the same global circulation track as USDT.

If this pattern repeats across ten or twenty small countries in the next three years, it will form the nascent shape of a new international financial order: the globalization of sovereign currencies outsourced to private stablecoin issuers.

But this path is not without costs.

First, there's the risk to monetary sovereignty. If a nation's stablecoin's liquidity, wallet access, and transaction routing rely on Tether, what happens to the central bank's visibility and control over monetary circulation? There is currently no clear answer.

In the future, if half of Georgian households receive remittances via GEL₮, and Tether faces a reserve crisis, the pressure wouldn't just be on Tether's balance sheet, but also on Georgia's social stability.

Secondly, if all small countries' native stablecoins ultimately pass through USDT for cross-border entry and exit, then the surface reality of "currency on-chain" might actually be these countries further integrating into the USDT-centric on-chain dollar system. For nations undertaking this within a de-dollarization context, this is a paradox worth considering upfront.

The BIS's repeated warnings in recent years about the impact of private stablecoins on monetary sovereignty and financial stability are not unfounded.

The issuance structure, reserve custodian, and chosen technical chain for GEL₮ have yet to be disclosed. These details will determine whether it is a genuine "sovereign-backed stablecoin" or a "standard Tether product under a government banner."

But there's a more important observation point than the specifics: Will a second, third country sign a similar template agreement with Tether in the next 12 months?

If so, Tether would transform from a stablecoin issuer into a cross-sovereign financial infrastructure service provider that issues native currency stablecoins for sovereign nations.

This is a species we previously lacked a term for. It's not a bank, not a central bank, not a payment company, and not a regular stablecoin issuer. It is a cross-sovereign on-chain minting organization built from regulatory arbitrage, network effects, and technological standardization.

Looking back three years from now, the contract signed on May 25, 2026, might prove more significant than any crypto news from that entire week.