Tether's new business, helping small countries issue stablecoins

Authored by: Little Biscuit, Deep Tide TechFlow

On May 25, the stablecoin issuer Tether announced it would collaborate with the Government of Georgia to issue GEL₮, a stablecoin pegged to the lari.

The press release is written in a very proper, well-behaved way: reducing costs, accelerating settlement, and promoting cross-border payments. CEO Ardoino repeated that same line again—stablecoins are becoming the infrastructure of global finance.

If you put it into Tether’s recent actions over the past 24 months, what Tether is doing is taking the on-chain issuance interface for a small country’s currency and the global distribution channel, and bringing them into its own hands one by one.

Tether’s product lineup is, in fact, a diagram of the token-minting business.

Unfold Tether’s “card table”: USDT, with a market cap of $189 billion, the world’s No. 1—yet U.S. users can’t use it; USAT, a dollar stablecoin launched earlier this year for the GENIUS Act-compliant market, the “U.S. version” of USDT; EURT, the euro stablecoin, pushed back by MiCA and set to stop redemptions in November 2025; MXNT is the Mexican peso; CNHT is offshore renminbi, and its scale has always been small; GEL₮, the lari stablecoin now planned.

By currency, it looks chaotic, but the strategic intent is actually clear. Tether is testing one question: outside the main U.S. dollar channel, can “issuing local-currency stablecoins for sovereign states” be turned into a replicable, standardized business?

USDT is responsible for holding the position of the global dollar shadow currency. USAT and EURT are compliance attempts in heavily regulated markets. As for the rest—MXNT, CNHT, and GEL₮—the commonalities are unmistakable: weak internationalization of the local currency, expensive cross-border payments, and high reliance on remittances—yet not to the extent that they are cut off in a single sweep like Iran or North Korea.

Georgia is the latest model of this playbook—for now.

Why is Georgia willing to sign?

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

There are pain points. According to IMF data, over the past decade, remittances have accounted for about 15% of Georgia’s GDP, and 40–45% of monthly household income for receiving families comes from remittances. The money mainly flows back from Russia, Greece, and the United States. For each traditional wire transfer, the cost and time loss are real, tangible expenses for these families. If on-chain lari can be made to work, it would be a genuine benefit for ordinary people.

The compliance framework is ready. The National Bank of Georgia spent years building a digital asset regulatory framework—reserves, redemption rights, issuer supervision, AML—and also proactively aligned with the U.S. GENIUS Act. This step is intentional; the goal is to turn Georgia into a digital asset hub in the Caucasus region.

Early groundwork has already been laid. In 2023, Georgia signed an MOU with Tether. In the same year, it carried out a digital lari pilot with Ripple, and it also signed a cooperation agreement with Hedera. GEL₮ did not appear out of thin air.

The logic is very clear: use Tether’s global distribution network to trade for faster internationalization of its own currency.

Georgia could also issue its own CBDC, but no matter how fast a CBDC is, it only transfers within its own system. By connecting to Tether’s network, for the first time the lari can be directly swapped with USDT and USDC within the same liquidity pool, and any crypto wallet can hold it. This is Georgia using a compliant framework as the consideration—renting the global pipeline that Tether has already built.

What does Tether get?

Georgia is too small. The annual size of the remittance market is less than $5 billion. Add domestic payments, and at most you get only tens of billions of stablecoin circulation—tiny compared with USDT’s $189 billion.

So Tether’s bet isn’t on Georgia itself—it’s on the template.

For every additional country, the solution of “issuing local-currency stablecoins on behalf of sovereign states” becomes more mature. Once GEL₮’s compliance architecture, reserve mechanisms, and redemption process are proven, the next countries that want to do it—Azerbaijan, Armenia, Uzbekistan, Kenya, and Nigeria—can directly apply the same model, shrinking the timeline from years to a few months.

The real moat is one layer deeper. When a country’s local-currency stablecoin can be swapped with USDT within the same liquidity network, the country’s currency is quietly integrated into an informal dollar system anchored by USDT. Tether doesn’t need to compete for these countries’ central bank decision-making power—it only needs to ensure that it is the intermediary router.

This logic is reminiscent of 19th-century London’s financial export. London banks didn’t go to the colonies to become central banks; they laid down clearing, discounting, and exchange systems layer by layer, and then everyone had to run on London’s rails. The difference is that back then it was unilateral colonization; now it is bidirectional and voluntary. Small countries are willing to sign because they can’t wait for SWIFT to be reformed. Tether is willing because it occupies the key position in locking in the next generation of financial infrastructure.

Outsourcing sovereign currency

The digital euro, still stuck in public consultation after being discussed for five years under MiCA, the ECB, and central banks of various countries.

Georgia, a country whose GDP is even smaller than Kunming’s, used a contract with a private company to bypass the entire “the state issues CBDC by itself” process, directly sending its local currency onto a global circulation track equivalent to USDT.

If over the next three years this happens across ten or twenty small countries, it could be the embryonic form of a new international financial order—globalization of sovereign currencies outsourced to private stablecoin issuers.

But this path doesn’t come without a cost.

First is currency sovereignty risk. If the liquidity, wallet entry points, and transaction routing of a local-currency stablecoin all depend on Tether, what would that do to the domestic central bank’s visibility into and control over money circulation? There is currently no clear answer.

In the future, if half of Georgia’s households use GEL₮ to receive remittances, and if Tether faces any reserve crisis, the pressure would not only fall on Tether’s balance sheet—it would also threaten Georgia’s social stability.

Second, if all small countries ultimately enter and exit by using their local-currency stablecoins to swap via USDT, then on the surface it would look like their currencies are on-chain; in reality, these countries may be further integrated into a USDT-centered on-chain dollar system. For countries trying to do this in a de-dollarization context, it is a paradox worth thinking through in advance.

For the past two years, BIS has repeatedly warned about the impact of private stablecoins on monetary sovereignty and financial stability—there is a reason for that.

Tether has not yet disclosed the details of GEL₮’s issuance structure, the reserve custodian, or the technical chain choice. These details will determine whether it is truly a “sovereign-backed stablecoin,” or merely a “regular Tether product with the government’s name attached.”

But there is one observation that is more important than the details: in the next 12 months, will a second or third country use the same template and sign up with Tether?

If so, Tether will evolve from a stablecoin issuer into a cross-sovereign financial infrastructure service provider that issues local-currency stablecoins on behalf of sovereign states.

This is a species we previously had no words for. It is neither a bank nor a central bank, neither a payments company nor a typical stablecoin issuer. It is a cross-sovereign, on-chain minting organization built by regulatory arbitrage, network effects, and technical standardization.

Looking back after three years, the contract signed on May 25, 2026 might be more important than any single cryptocurrency news story from that week.