Tether plans government-backed lari token for Georgia’s digital payments

Tether moved to place Georgia at the center of a rare state-linked stablecoin experiment, saying it planned to launch GELT, a token representing the Georgian lari, with support from the Government of Georgia. The company said the digital currency was designed to support cross-border commerce, fintech development and digital payments, a mix of use cases that suggests the project is meant to serve both everyday transactions and the country’s bid to market itself as a crypto-friendly jurisdiction.

The announcement left a key question unresolved: what, exactly, the arrangement was supposed to be. Tether did not fully explain whether GELT amounted to a central bank digital currency, a private stablecoin with public backing, or something in between. Georgia’s prime minister, Irakli Kobakhidze, the head of the central bank, Natia Turnava, and MP Vakhtang Turnava were quoted in Tether’s statement supporting innovation, but the government did not spell out its role in the token’s launch. That ambiguity matters, because a government-backed token blurs the line between public money and private crypto infrastructure.

Georgia has been building the legal scaffolding for that experiment. On March 6, the National Bank of Georgia said it had developed rules for the initial offering of stable virtual assets, including full reserve backing, offering documents and external auditor verification. The framework also required prior written consent from the central bank for a stablecoin offering. On May 11, Georgia enacted HB 1272, the Georgia Payment Stablecoin Act, creating a licensing regime for payment stablecoin issuers with reserve, disclosure, examination and reporting requirements.

The policy stakes extend well beyond Georgia. The Bank for International Settlements has warned that stablecoins can threaten financial stability and monetary sovereignty, especially when foreign currency-denominated tokens spread beyond niche crypto use. That warning hangs over any plan to scale a lari-backed token, particularly in a country that may want faster payments and more cross-border commerce without giving up control over its currency.

Tether’s own scale shows why the project attracts attention. The company said nearly $190 billion of its dollar-pegged USDT is in circulation. By contrast, its peso-pegged token has only a small amount in circulation, and a token tied to the offshore Chinese yuan is being wound down because demand is weak. GELT, if it moves forward, would test whether a private issuer and a sovereign government can share the same digital-money experiment without distorting the state’s monetary authority.