Summary
- Tether collaborates with the Government and Central Bank of Georgia to introduce GELT, a stablecoin linked to the Georgian Lari.
- This initiative is part of Georgia's goal to establish itself as a leading crypto hub, utilizing a regulatory framework aligned with U.S. standards.
- The stablecoin aims to reduce transaction costs and enhance cross-border trade, but Tether does not classify it as a central bank digital currency.
On Monday, Tether announced its intention to launch a stablecoin in Georgia, backed by the nation’s government, highlighting Georgia's proactive efforts to position itself as a crypto center that aligns with U.S. regulations.
The stablecoin, named GELT, will represent the Georgian lari digitally, as indicated in Tether's announcement. Tether characterized this initiative as one of the initial joint ventures aimed at integrating a national currency into the digital asset ecosystem through a specially designed framework.
With a population nearing 3.9 million, Georgia is laying the groundwork for “a more connected, transparent, and digitally empowered financial world,” stated Irakli Kobakhidze, the Prime Minister of Georgia.
The introduction of GELT is anticipated to represent a significant advancement for the region, offering citizens quick settlements, decreased transaction fees, and a direct link between the conventional banking system and Georgia’s expanding digital economy.
Tether's USDT stablecoin maintains a market capitalization of almost $190 billion. The announcement on Monday reflects Tether’s strategy to extend its influence beyond the U.S. dollar; the company also issues tokens pegged to the euro, British pound, Mexican peso, and gold. However, none of these tokens have received explicit endorsement from a national government or its central bank.
Tether emphasized that the Government and National Bank of Georgia have devoted years to developing a regulatory framework for digital assets, aligning their rules with those established in the U.S. under the GENIUS Act last year. This framework includes guidelines on reserve management, redemption rights, and oversight of issuers.
Georgia already permits residents to settle taxes using digital assets that convert into the local currency. In 2023, the central bank partnered with Ripple to pilot a digital version of Georgia’s national currency via the Ripple CBDC Platform.
“The National Bank of Georgia is eager to partner with global innovators like Tether to enhance our secure, modern, and internationally aligned digital financial infrastructure,” said Natia Turnava, President of the National Bank of Georgia.
While Monday's announcement hints at forthcoming details, it does not suggest that GELT will operate as a central bank digital currency (CBDC). Unlike stablecoins, which are issued by private entities on public networks, CBDCs are regulated and maintained by governments, raising financial surveillance concerns among some conservative factions.