Tether Invests $18.75M in XREX Group, Launches New Stablecoin XAU1 to Boost Cross-Border Payments
Summary:
Tether, the company behind the USDT stablecoin, has invested $18.75 million in XREX Group and unveiled a new stablecoin, XAU1. The partnership focuses on enhancing cross-border business-to-business payments and fostering digital asset and regulatory tech innovations. The investment will allow XREX to offer regulatory-compliant, USDT-based cross-border B2B payments, improving transactional efficiency and reducing costs. Additionally, XREX will launch XAU1, a USD-pegged stablecoin backed by Tether gold, providing a stable hedge against inflation. Despite potential stability issues with stablecoins, the partnership reflects Tether's commitment to fostering financial inclusion in emerging markets.
Tether, the organization responsible for the USDT stablecoin, has revealed a substantial investment of $18.75 million in XREX Group, concurrently announcing the inception of a new stablecoin, XAU1. The partnership has been marked as a push to better cross-border business-to-business (B2B) payments and foster innovation within the digital asset sector and "regulatory technology." The CEO of Tether, Paolo Ardonio, shared his viewpoint, emphasizing that their alliance with XREX will pioneer several transformative initiatives, including the roll-out of an innovative unitized stablecoin by the Unitas Foundation and the delivery of USDT-based cross-border payment solutions that will elevate the regional standards in financial accessibility and efficiency.
The capital injection by Tether into XREX Group comes with the mission of enabling XREX to provide USDT-based cross-border B2B payments in compliance with regulations. The move is expected to result in operational efficiencies and potential cost savings to businesses engaged in cross-border transactions. Ardonio expressed the significance of this partnership, stressing Tether's unflinching commitment to promoting financial inclusion in developing markets.
On top of the $18.75 million investment, XREX, in collaboration with the Unitas Foundation, is set to roll out XAU1. XAU1 is a stablecoin tied to the value of the US dollar and backed with an excess reserve of Tether gold (XAUt), promising to deliver a stable investment alternative while serving as a hedge against inflation. Wayne Huang, CEO of XREX Group, underscored the importance of this offering, stating that Tether's robust support and investment is leading them to broaden their success into a RegTech product line, thereby bolstering XREX's status as a responsible financial institution.
Even though stablecoins are designed to keep their values constant and pegged, market factors and manipulations reveal potential weaknesses to their stability. As the Markets in Crypto-Assets Regulation (MiCA) are about to come to light, exchanges like Binance are preparing to migrate European users from unauthorized stablecoins to their regulated counterparts. Delving into which stablecoins comply with the MiCA regulatory requirements poses a challenge for the industry's future, and requires increased regulatory clarity. Binance's precautionary strategy to "sell-only" unauthorized stablecoins is reflective of the ongoing regulatory transformation.
Published At
6/5/2024 1:45:50 PM
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