Tether Announces Strategic Investment

Tether invests $18.75 million in XREX Group and introduces the XAU1 stablecoin to improve cross-border B2B payments and regulatory technology

Tether, the digital asset corporation responsible for the USDT stablecoin, has launched a new stablecoin, XAU1, and a strategic investment of $18.75 million in XREX Group.

The collaboration is intended to enhance cross-border business-to-business (B2B) payments and advance the digital asset industry and “regulatory technology,” as stated in the company’s press release.

Paolo Ardonio, the CEO of Tether, addressed the announcement:

“Our collaboration with XREX will spearhead several ground-breaking initiatives, including the launch of a unique new unitized stablecoin by the Unitas Foundation and the facilitation of USDT-based cross-border payments, setting a new standard for financial accessibility and efficiency in the region.”

International remittances

Tether’s investment in XREX Group will allow XREX to facilitate cross-border B2B payments that are regulatory-compliant and based on USDT at a rate of $1.00.

The development is expected to provide businesses with “potentially lower costs and efficiency” when conducting cross-border transactions.

Ardoino expressed the partnership’s importance:

“Tether’s strategic investment in XREX Group signifies our unwavering commitment to fostering financial inclusion in the emerging markets”

The introduction of the XAU1 stablecoin

XREX will collaborate with the Unitas Foundation to introduce XAU1 in addition to the $18.75 million investment.

XAU1 is a unitized stablecoin that is USD-pegged and over-reserved with Tether gold (XAUt). The press release states this will be a stable alternative and a hedge against inflation.

Wayne Huang, the CEO of XREX Group, underscored the significance of the offering as he stated:

“With Tether’s strong support and investment, we’re expanding this success into a RegTech product line that further refines XREX Group as a responsible financial institution.”

What is the level of stability that stablecoins exhibit?

Market dynamics, manipulations, and fluctuations expose vulnerabilities to stablecoin stability despite their design and pegged values.

Exchanges such as Binance are preparing to transition European users from unauthorized stablecoins to regulated equivalents in anticipation of the impending Markets in Crypto-Assets Regulation (MiCA) regulations.

The future necessitates regulatory clarification for stablecoins; however, determining which stablecoins satisfy MiCA regulatory requirements remains uncertain.

This cautious approach is reflected in Binance’s “sell-only” strategy for unauthorized stablecoins as the regulation overhaul proceeds.