- Tether is expanding its core stablecoin business model by investing in companies aligned with its targeted growth areas.
- The company‘s latest investment is in Taiwan-based XREX.
- XREX specializes in blockchain solutions for small and medium-sized businesses.
Stablecoin giant Tether is diversifying its business model beyond stablecoins. The company is strategically investing in companies operating in alternative fields, such as emerging technologies and education to expand its reach and impact across various sectors through leveraging the vast potential of blockchain and digital assets.
Tether’s latest diversification bid is an $18.75 million investment in Taiwan-based XREX, a regulated blockchain-enabled financial institution. This collaboration, among other goals, aims to facilitate cross-border payments in emerging markets.
XREX Looks to Bring Innovation
In a strategic move to expand its reach and diversify its offerings, Tether announced a $18.75 million investment in XREX to drive innovation and financial inclusion in emerging markets, particularly enabling USDT cross-border B2B payments.
Sponsored
Founded in 2018 by Wayne Huang and Winston Hsiao, XREX positions itself as “a blockchain-enabled financial institution” that offers “enterprise-grade banking to SMBs and novice-friendly financial services.”
The company has secured licensing across multiple jurisdictions, including a FinCEN license in the U.S. and a Major Payment Institution license in Singapore, demonstrating its commitment to regulatory compliance.
The tie-up will also see several innovations, including the rollout of RegTech, a solution to combat the illicit use of stablecoins, and the launch of XAU1, a stablecoin pegged to the U.S. dollar and “over-reserved” by Tether Gold (XAUt), offering holders an alternative inflation hedge.
Commenting on the collaboration with XREX, Tether CEO Paolo Ardoino stated that this investment aligns with the companyโs vision of building resilient infrastructure that extends beyond the confines of the crypto market.
Tether Expansion Beyond Stablecoins
Tether’s investment in XREX reflects the company’s broader vision to diversify beyond its core stablecoin business. In April, Tether officially announced a formal organizational structure comprising four distinct divisions: Data, Finance, Power, and Education. This strategic restructuring underscored Tether’s commitment to driving growth and innovation across multiple fronts.
The Data division focuses on emerging technologies, the Finance division encompasses Tether’s core stablecoin operations, the Power division concentrates on proof-of-work (PoW) mining initiatives, and the Education division is dedicated to spreading knowledge about blockchain and cryptocurrencies worldwide.
On the Flipside
- Launching an inflation-hedged stablecoin offering suggests Tether expects the cost of living crisis to continue.
- Partnering with a regulated institution like XREX allows Tether to navigate complex financial regulations in multiple jurisdictions.
Why This Matters
The collaboration between Tether and XREX represents a significant milestone in the mainstream adoption of digital assets. With their combined expertise, they are well-positioned to spearhead further inroads into the legacy system.
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