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Tether Invests $18.75 Million in XREX to Enhance Cross-border Payment

AuthorRaymond Munene
Crypto News Author
Fact Checked by Kamal Masri
Last updated: June 05, 2024
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Tether Invests $18.75 Million in XREX

Highlights:

  • Tether invests $18.75 million in XREX to improve USDT-based cross-border payments in emerging markets.
  • The investment supports XAU1 stablecoin launch, providing a stable alternative and hedge against inflation.
  • Tether and XREX aim to transform regulatory technology, enhancing solutions to detect and prevent illicit use of stablecoins.

Tether has announced an investment of $18.75 million in XREX Group to enhance USDT-based cross-border payments, focusing on emerging markets. This strategic move aims to facilitate compliant business-to-business transactions and drive regulatory technology transformation.

Enhancing Cross-Border Transactions

Tether, a leading entity in the digital asset industry, has committed $18.75 million to XREX Group, a fully regulated, blockchain-enabled financial institution. This collaboration is set to revolutionize USDT-based cross-border payments, particularly in emerging markets, by offering businesses greater ease, efficiency, and potentially lower costs.

This investment will also support the launch of XAU1, a unique stablecoin pegged to the USD and over-reserved with Tether Gold (XAUt). XAU1 is designed to provide customers with a stable alternative and a hedge against inflation, enhancing financial stability in volatile markets.

Driving Transformation in Regulatory Technology

Through this partnership, Tether and XREX aim to innovate in regulatory technology (RegTech). Wayne Huang, CEO of XREX Group, highlighted the significance of this collaboration, stating,

Tether and XREX have collaborated successfully to help law enforcement agencies identify, arrest, and sentence criminals. 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.

This investment aligns with Tether’s broader strategy to diversify its portfolio and expand into various sectors, including data, finance, power, and education. Recently, Tether has ventured into crypto mining and artificial intelligence, broadening its operational scope and reinforcing its commitment to technological innovation.

XREX boasts an impressive lineup of investors, including the Taiwanese Government National Development Fund, CDIB Capital Group, SBI Holdings, E.Sun Financial Holding, ThreeD Capital, AppWorks, BlackMarble, and New Economy Ventures. Additionally, XREX Singapore recently acquired the Monetary Authority of Singapore’s Major Payment Institution license, complementing its existing registration under Taiwan’s Financial Supervisory Commission.

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Expanding Financial Inclusion

Tether’s CEO, Paolo Ardoino, emphasized the importance of this investment, stating,

Tether’s strategic investment in XREX Group signifies our unwavering commitment to fostering financial inclusion in emerging markets. Our collaboration with XREX will spearhead several groundbreaking initiatives, including launching a unique unitized stablecoin by the Unitas Foundation and facilitating USDT-based cross-border payments, setting a new standard for financial accessibility and efficiency in the region.

Winston Hsiao, CRO of XREX Group, added,

We thank Tether and all existing investors for supporting this up round, which involved issuing new team (common) shares to fuel our top talent recruiting. This stablecoin-enabled financial inclusion movement will bring long-term and positive change to the existing global clearance and settlement systems.

Tether’s Strategic Expansion

Recently, Tether unveiled a comprehensive restructuring plan to broaden its operational spectrum. This strategic pivot introduces four new business units: Tether Data, Tether Finance, Tether Power, and Tether Edu, signaling a diversification from its core stablecoin operations.

Moreover, according to the Crypto2Community report, in the first quarter of 2024, Tether reported a net profit of $4.52 billion. This financial success was bolstered by gains from Bitcoin and gold investments and robust operating profits. By the end of March, Tether’s net equity had climbed to $11.37 billion. This marks a significant increase from the $7.01 billion recorded at the end of the previous year.

Despite facing challenges from Circle’s USDC surpassing USDT in transaction volume, Tether retains its dominant position. Tether holds over 68% of the market share. Moreover, its Bitcoin reserves currently stand at 75,300 BTC, valued at approximately $4.38 billion. Additionally, the company holds $6.3 billion in excess reserves, reinforcing its financial stability.

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