Tether, the issuer of the world’s largest stablecoin by market cap, announced on Dec. 17 that it is investing in Malta-based stablecoin firm StablR.
Tether, the issuer of the world’s largest stablecoin by market cap, announced on Dec. 17 that it is investing in Malta-based stablecoin firm StablR. This move comes as Europe prepares to fully implement its Markets in Crypto-Assets Regulation (MiCA), set to take effect on Dec. 30, 2024.
StablR operates two stablecoins: StablR Euro (EURR), pegged to the euro, and StablR USD (USDR), pegged to the U.S. dollar. As of the investment announcement, EURR had a market cap of $3.4 million, representing about 1% of the total euro-based stablecoin market. USDR, however, was not listed on major crypto platforms like CoinMarketCap at that time.
The stablecoin firm was founded in 2023 and recently secured an Electronic Money Institution (EMI) license from the Malta Financial Services Authority, allowing it to issue fully compliant stablecoins under MiCA. This marks a key step in StablR’s strategy to navigate the regulatory landscape as MiCA requires issuers to meet strict compliance standards regarding reserves and governance.
Tether’s investment in StablR comes as its own stablecoin, USDT, faces regulatory uncertainty, especially in Europe. Following MiCA’s introduction, major exchanges like Coinbase have removed or restricted access to non-compliant stablecoins, and Tether has suspended its euro-pegged stablecoin, EURT. EURT had a market cap of $27 million at the time of suspension.
Under the agreement, StablR will leverage Tether’s tokenization platform, Hadron, which recently launched. Hadron allows for the tokenization of various assets, including stablecoins, and provides tools for compliance such as KYC, AML, and risk management. It also enables the transfer of StablR’s stablecoins to Ethereum and Solana wallets.
Paolo Ardoino, Tether’s CEO, stated that the European stablecoin market is evolving quickly and is poised for significant growth. He emphasized that Tether supports projects like StablR that align with the company’s vision of fostering innovation and compliance within the European market.
In addition to the investment, StablR has raised 3.3 million euros ($3.46 million) in a seed round, with investors including Deribit, Theta Capital, Blocktech and Folkvang. StablR plans to expand the availability of its stablecoins beyond Ethereum and Solana, increasing their interoperability.
Tether’s focus on backing MiCA-compliant stablecoin projects like StablR marks a shift in its strategy. Rather than focusing on modifying its existing stablecoins to align with MiCA, Tether is investing in ventures that are already in compliance with the new regulations. This approach allows Tether to remain active in Europe’s growing stablecoin market while avoiding regulatory conflicts.
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