Tether's new business: helping small nations issue stablecoins

Original Author: Xiaobing, Deep Tide TechFlow

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

The press release was standard: reducing costs, accelerating settlements, and promoting cross-border payments. CEO Ardoino reiterated that line: stablecoins are becoming the infrastructure of global finance.

Viewed within the context of Tether's actions over the past 24 months, what Tether is doing is systematically bringing the on-chain issuance interfaces and global distribution channels of small countries' currencies into its own hands.

Tether's Product Line Is Essentially a Map of Issuance-as-a-Service

Let's lay out Tether's hand: USDT, with a $189 billion market cap, is the world's largest but inaccessible to US users; USAT, launched earlier this year for the GENIUS Act compliant market, is USDT's "American alter ego"; EURT, the euro stablecoin, was beaten back by MiCA and will cease redemptions in November 2025; MXNT is the Mexican peso; CNHT is the offshore yuan, which has always been small-scale; and now GEL₮, the Lari stablecoin to be issued.

It looks messy by currency, but the strategic intent is clear. Tether is testing something: whether issuing local currency stablecoins for sovereign nations can become a repeatable, standardized business beyond the US dollar's main channel.

USDT is responsible for maintaining its position as the global dollar shadow currency. USAT and EURT are attempts at compliance in heavily regulated markets. The common thread for the rest—MXNT, CNHT, GEL₮—is clear: countries with weak currency internationalization, high cross-border payment costs, heavy reliance on remittances, but not so isolated as to be completely cut off like Iran or North Korea.

Georgia is currently the latest model for this strategy.

Why Would Georgia Sign?

With a population of 3.7 million and a GDP of about $35 billion—smaller than Kunming, China—Georgia still has three conditions that make it particularly suitable.

It has a pain point. IMF data shows that over the past decade, remittances have accounted for about 15% of Georgia's GDP, and recipient families derive 40-45% of their monthly income from them. Money mainly flows from Russia, Greece, and the US. The cost and time loss of each traditional wire transfer represent real money for these families. If the on-chain Lari can work, it would be a genuine benefit for ordinary 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 proactively aligned it with the US's GENIUS Act. This step was intentional, aiming to make Georgia a digital asset hub in the Caucasus region.

Groundwork has been laid. Georgia signed an MOU with Tether in 2023, conducted a digital Lari pilot with Ripple the same year, and also signed a cooperation agreement with Hedera. GEL₮ didn't just appear out of nowhere.

The logic is clear: using Tether's global distribution network in exchange for the acceleration of its own currency's internationalization.

Georgia could also issue a CBDC itself, but no matter how fast a CBDC is, it 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 within the same liquidity pool, and any crypto wallet can hold it. This is effectively Georgia renting Tether's already-built global pipeline in exchange for its regulatory framework.

What Did Tether Gain?

Georgia is too small. The annual remittance market is less than $5 billion. Even including domestic payments, the potential stablecoin circulation is at most a few tens of billions of dollars—a tiny fraction compared to USDT's $189 billion.

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

With each additional country, the solution of "issuing local currency stablecoins on behalf of sovereign states" becomes more mature. Once the compliance framework, reserve mechanism, and redemption process for GEL₮ are successfully tested, the next interested countries—Azerbaijan, Armenia, Uzbekistan, Kenya, Nigeria—can directly adopt the template, compressing the timeline from years to months.

The true moat lies deeper. When a country's local currency stablecoin is interchangeable with USDT within the same liquidity network, that country's currency is quietly integrated into the informal dollar system anchored by USDT. Tether doesn't need to vie for central bank decision-making power in these countries; it only needs to ensure it remains the intermediary router.

This logic resembles the financial export of 19th-century London. London banks didn't become central banks in the colonies; they just layered clearing, discounting, and exchange systems everywhere, forcing everyone to use London's rails. The difference is that it was one-way colonization then, whereas now it's a mutually voluntary agreement. Small countries are willing to sign; they can't afford to wait for SWIFT upgrades. Tether is willing to do it, locking in a crucial position within the next generation of financial infrastructure.

Sovereign Currency Outsourcing

The digital euro, entangled with MiCA, the ECB, and various national central banks for five years, is still in public consultation.

Georgia, a country with a GDP smaller than Kunming, bypassed the entire process of "a state issuing its own CBDC" with a single contract with a private company, sending its local currency directly onto the same global circulation track as USDT.

If this happens in ten or twenty small countries over the next three years, it will form the prototype of a new international financial order: the globalized outsourcing of sovereign currencies to private stablecoin issuers.

But this path has its costs.

First, there's the risk to monetary sovereignty. If the liquidity, wallet access, and transaction routing of a local currency stablecoin all depend on Tether, there's currently no clear answer as to how a country's central bank's visibility and control over currency circulation will change.

In the future, if half of Georgian families use GEL₮ to receive remittances, then any reserve crisis at Tether would not just stress Tether's balance sheet but also Georgia's social stability.

Secondly, if all small countries' local currency stablecoins eventually flow in and out via USDT swaps, then while it appears to be local currencies on-chain, in reality, these countries might be further integrating into the USDT-centric on-chain dollar system. For countries undertaking this within a context of de-dollarization rhetoric, this is a paradox worth considering in advance.

The BIS's repeated warnings in recent years about the impact of private stablecoins on monetary sovereignty and financial stability are not without reason.

Details about GEL₮'s issuance structure, reserve custodian, and chosen blockchain technology have not yet been disclosed. These details will determine whether it is a truly "sovereign-backed stablecoin" or a "standard Tether product bearing a government's name."

But there is one observation point more important than the details: Will a second and third country sign cooperation agreements with Tether using the same template in the next 12 months?

If so, Tether will transform from a stablecoin issuing company into a cross-sovereign financial infrastructure service provider that issues local currency stablecoins on behalf of sovereign nations.

This is a species we previously had no word for. Not a bank, not a central bank, not a payment company, nor an ordinary stablecoin issuer. It is a cross-sovereign on-chain minting organization pieced together from regulatory arbitrage, network effects, and technological standardization.

Looking back three years from now, this contract signed on May 25, 2026, might be more important than any other crypto news from that week.