Tether has invested $18.75 million in XREX Group, a fully regulated blockchain-powered financial institution. This investment is part of a broader strategy to enhance the use of USDT, Tether’s stablecoin, in cross-border business-to-business (B2B) transactions, particularly in emerging markets.
This collaboration with XREX is not just about pumping money into another crypto venture; it’s about strategically innovating financial transactions in regions that are often overlooked by mainstream financial services. By leveraging the stability of USDT, Tether and XREX aim to provide a more efficient, cost-effective alternative for businesses operating across borders.
One of the most intriguing aspects of this partnership is the launch of XAU1, a new stablecoin backed by Tether Gold (XAUt). This initiative, undertaken in collaboration with the Unitas Foundation, is designed to offer a stable medium of exchange that is pegged to the US dollar but backed by physical gold, providing a hedge against inflation—something critically important in emerging economies affected by currency volatility.
This investment also marks a deep dive into Regulatory Technology (RegTech). Tether and XREx’s combined efforts are set to improve mechanisms for detecting and preventing the illicit use of stablecoins. Such advancements are crucial at a time when the global regulatory landscape for cryptocurrencies is becoming increasingly complex and scrutinized.
Paolo Ardoino, CEO of Tether, noted that it aligns with Tether’s commitment to building a resilient infrastructure that transcends the traditional boundaries of the crypto market.
“Our collaboration with XREX will spearhead several groundbreaking initiatives, setting a new standard for financial accessibility and efficiency in the region,” Ardoino said.
The strategic significance of Tether’s investment is further underscored by XREX’s regulatory achievements. The firm recently acquired a Major Payment Institution license from the Monetary Authority of Singapore and operates under Taiwan’s Financial Supervisory Commission’s Registered VASP status. Such credentials enhance the credibility and operational scope of XREX, making it a formidable ally in Tether’s expansion plans.
XREX CEO Wayne Huang highlighted the previous successes in collaboration with law enforcement to tackle financial crimes and noted that this investment would help expand their RegTech capabilities.
“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,” Huang stated.
The investment comes at a time when cryptocurrency is gaining mainstream acceptance, yet faces persistent challenges around regulation, trust, and the need for a stable financial environment conducive to large-scale adoption. Tether’s funding is a vote of confidence not only in XREX but also in the potential of cryptocurrencies to facilitate meaningful financial innovation.
With support from other high-profile investors, including the Taiwanese Government National Development Fund and entities like SBI Holdings and E.Sun Financial Holding, XREX intends to play a pivotal role in shaping the future of financial transactions in emerging markets.
