Tether, the company behind the $83 billion USDT stablecoin, has recently invested an undisclosed sum in payment processor firm CityPay.io, making a significant move in the market. CityPay.io has promptly integrated USDT as a payment option for users in over 600 locations, including restaurants, shops, and hotels in the Caucasian country of Georgia. Interestingly, CityPay.io had earlier this year linked up with Binance Pay, the payment arm of the world’s largest crypto exchange, permitting purchases with cryptocurrencies.
This investment by Tether marks a strategic alignment with the company’s new plan to allocate a portion of its excess profits for the purchase of bitcoin (BTC) and for venturing into infrastructure, payments, and communication projects. With Tether reporting nearly $1.5 billion in net profit for Q1, the opportunity to expand also saw them announcing sustainable energy production and bitcoin mining in Uruguay earlier this week.
Stablecoins have become a vital component in the crypto ecosystem, acting as a bridge between government-issued currencies and facilitating trading. Accordingly, issuers are now leveraging stablecoins for payments and remittances, particularly within developing nations. For instance, Bitcoin-based payments app Strike integrated USDT recently to expand its presence in 65 countries. Meanwhile, Circle, a rival stablecoin issuer, collaborated with Block’s (SQ) subsidiary TBD to offer remittance payments using its own stablecoin, USDC.
Tether’s chief technology officer, Paolo Ardoino, shared in a podcast episode with The Block that USDT’s usage is evolving with a current split of 40% for value transfers and 60% for crypto trading. This shift in usage patterns might prompt questions about the future role of stablecoins. Will their primary utility continue to be a trading tool, or will they gain even more prominence as a payment method?
While Tether’s investment in CityPay.io and its expanding role in the payment processing industry play an essential role in boosting crypto adoption, there are concerns about the potential risks tied to stablecoins and their rapid growth. For this reason, authorities and regulators worldwide are closely monitoring and assessing the impact of stablecoins to ensure financial stability and protect consumers. As the rapidly evolving market continues to expand, it will be interesting to observe how stablecoins adapt and how they manage to maintain their influence and utility in the crypto ecosystem.
Source: Coindesk
