Tether, the crypto company behind the $140 billion USDT cryptocurrency, announced Tuesday that it has invested in European stablecoin company StablR.
StablR issues euro and US dollar stablecoins EURR and USDR and obtained an electronic money institution (EMI) license in Malta in July, a necessary step to comply with EU-wide regulations.
Tether will also support StablR’s operations with its recently unveiled Hadron tokenization platform, providing compliance monitoring, know-your-customer (KYC) and anti-money laundering (AML), risk management tools. and secondary market monitoring.
The companies did not disclose the size of the investment or the valuation. A Tether spokesperson told CoinDesk that Tether now holds a “significant equity position” in StablR.
The investment is the latest example of Tether’s strategy to keep a foothold in the EU by supporting small issuers and providing services through its Hadron tokenization platform as the bloc’s MiCA regulations take effect by end of this year. The company decided to shut down its own euro-pegged stablecoin last month, while also investing in Dutch-regulated payments company and stablecoin issuer Quantoz.
Read more: EU countries struggle to implement MiCA as deadline for crypto regulation overhaul looms
“The European stablecoin market is at a turning point, with regulation finally catching up with innovation,” Tether CEO Paolo Ardoino told CoinDesk. “The company views the evolving regulatory landscape as a positive step forward, but is concerned about the systemic risks it introduces, particularly within the already vulnerable European banking sector.” Tether has sharply criticized MiCA rules that require major stablecoin issuers to hold a large portion of collateral assets in bank deposits. The company holds over 83% of USDT reserves in US government bonds, repurchase agreements and money market funds.
Stablecoins, or price-stable cryptocurrencies tied to fiat currencies, are a $200 billion and rapidly growing digital asset class. They are popular as liquidity for crypto trading and are increasingly used for everyday payments and remittances due to cheaper and faster settlements using blockchains instead of traditional banking rails. US dollar stablecoins dominate the market with a share of almost 99%, while their euro counterparts have lagged in adoption, with a market value of around $400 million.
