Author: Zen, PANews
Tether's latest move in Georgia has once again brought this small Eurasian country into the spotlight of the crypto industry.
According to publicly available information, Tether plans to launch a stablecoin, GEL₮, pegged to the Georgian lari, and describes it as a project being promoted in cooperation with the Georgian government.
For a country with a population of only a few million and no large local market, this move is quite symbolic. Georgia is not the center of the global crypto industry, but it is being repeatedly seen by stablecoin issuers, exchanges, and blockchain infrastructure companies as a "small-country node."
Once the world's second-largest mining country
Georgia, with a population of less than 4 million, was once one of the least known small countries in Europe. Its initial recognition in the crypto industry was largely due to its cryptocurrency mining business.
As early as 2014, Bitcoin mining company Bitfury established mining farms in the Tbilisi Free Industrial Zone in Georgia and dominated most of the mining activities. With the soaring value of cryptocurrencies like Bitcoin, a cryptocurrency craze swept through the public. In 2018, approximately 5% of Georgian households were involved in cryptocurrency mining, an industry that at its peak consumed about 15% of the country's electricity. Some even resorted to borrowing money or selling assets such as cars and homes just to raise funds to buy mining equipment.
During that period, Georgia was once hailed by the World Bank as a global cryptocurrency powerhouse. Cheap energy, tax incentives, and business-friendly regulatory policies combined to fuel the rapid development of the region's cryptocurrency mining industry, making it the world's second-largest cryptocurrency mining nation after China. This history also shaped the underlying tone of Georgia's early cryptocurrency narrative.
However, the reputation and profits from mining are clearly cyclical. In 2018, after the price of Bitcoin fell, a large number of mining activities in Georgia ceased because the revenue could not cover energy costs, and local industry insiders estimated that about 80% of mining projects shut down.
Mining giant Bitfury was not immune to this industry downturn and contraction. In 2020, Bitfury's BFDC Georgia remained the largest electricity consumer in the mining sector, consuming 434 million kilowatt-hours throughout the year; by the first quarter of 2022, Bitfury's electricity consumption had dropped to 98.5 million kilowatt-hours. At the beginning of 2023, BFDC Georgia's electricity consumption again decreased by 99.6% year-on-year.
At this point, Georgia's early advantages in the crypto industry—low-cost energy and a free zone tax system—were no longer sufficient to support a mining narrative of the same scale. It needed a new story, and it was in this context that the narrative of stablecoins, central bank digital currency pilots, and the VASP framework and financial infrastructure took over the label of "crypto-friendly country."
Combining regulatory rules and free zones into institutional advantages
In 2023, Tether signed a memorandum of understanding with the Georgian government with goals including developing blockchain, Bitcoin, and P2P infrastructure, supporting the local startup ecosystem and education programs, and exploring more resilient communication and financial systems.
In November of the same year, the Central Bank of Georgia announced that Ripple had become the technology partner for the Digital GEL pilot project. The selection process included the submission of a project implementation plan and a demonstration of the technical solution. The pilot project aimed to evaluate the potential application of CBDC technology in public sector, enterprise, and retail user scenarios.
For these crypto companies, Georgia's appeal lies primarily in the "operability" of its system. While the country's market regulation is not mature and lacks completeness, it provides a usable entry point for businesses.
On January 1, 2023, the Central Bank of Georgia's regulatory legislation for Virtual Asset Service Providers (VASPs) officially came into effect. The framework includes mandatory registration of VASPs with the Central Bank of Georgia, qualification standards for managers, and supervision from the perspectives of anti-money laundering and counter-terrorism financing. At that time, the framework mainly covered registration, registration cancellation, AML/CFT inspections and supervision, information accompanying virtual asset transfers, written instructions, additional requirements, and sanctions, but did not cover consumer protection and prudential supervision.
The regulations on stablecoins represent a crucial step in Georgia's institutional upgrade. On March 6, 2026, the Central Bank of Georgia issued the "Rules for the Initial Issuance of Stablecoins by Virtual Asset Service Providers," which clearly states its goal is to establish a safe and transparent regulatory framework for the initial issuance of stablecoins in Georgia. These rules apply to VASPs, and prior written consent from the Central Bank is required to provide stablecoin issuance services within Georgia.
Now, Tether's GELT program has taken this a step further, beginning to test the narrative of local currency stablecoins, in addition to dollar stablecoins, in a smaller, more cooperative jurisdiction.
The free zone system is another source of attraction for Georgia. In June 2025, Bitget disclosed that it had received regulatory approval in Georgia to offer digital asset trading and custody wallet services through the Tbilisi Free Zone, placing it within the narrative of "Eastern European expansion" and a global portfolio of licenses.
In its announcement, Bitget stated that the Tbilisi Free Zone offers tax advantages and has established relevant frameworks and processes for digital asset companies, thus providing international companies with "operational flexibility" and "regulatory clarity."
Georgia's free industrial zones are not a system specifically designed for the crypto industry. According to Georgia's Free Industrial Zones Law, the goal of free industrial zones is to create an attractive environment for economic activity and to promote the inflow of capital and technology; the law also stipulates that free industrial zones are areas with special status within Georgia, and businesses within these zones are subject to special economic and legal regimes.
Compared to the EU's MiCA, the Georgian Free Zone and VASP framework have a clearer positioning. MiCA establishes unified rules for the crypto asset market at the EU level, providing a high-threshold, high-value large-market licensing system; Georgia, on the other hand, offers a low-cost, short-chain, small-scale institutional interface suitable for localized trials and regional deployment.
This is why a free zone cannot be simply understood as a "low-tax zone." Georgia is not special if it is only low-tax; what is truly valuable is the combination of a low-tax system, free zone entities, VASP registration, stablecoin rules, and the government's willingness to cooperate.
Low-cost compliance testing ground for crypto companies
By combining the specific systems mentioned above with an examination of the actions of Binance, Ripple, Tether, and Bitget, it becomes clear that Georgia's role is actually quite clear.
Compared to major markets like the US, EU, Dubai, Singapore, and Hong Kong, Georgia offers virtually no advantages. Its unique niche is essentially that of a low-cost compliance hub. Companies can register, pilot programs, obtain limited licenses, and engage in localized collaborations here before considering integrating these initiatives into their global compliance strategy.
Binance's expansion in Georgia is a prime example. In March 2023, Binance announced the establishment of a regional hub in Georgia, emphasizing talent recruitment, blockchain education, regional crypto adoption, and collaborations with the Georgian Innovation and Technology Agency, CityPay, business schools, and universities.
Binance also mentioned that it already had a 25-person team in Georgia at the time and hoped to add more positions by the end of the year. If this were a purely transaction marketplace strategy, Binance should have emphasized users, trading volume, and fiat currency access. However, Binance emphasized education, public sector cooperation, payment gateways, and developer activities, indicating that Georgia was playing a role in regional relations and serving as a local ecosystem node.
Ripple's Digital GEL pilot program is similar. For Ripple, Georgia is not the end point for the global commercialization of CBDCs, but rather a collaborative window to enter the central bank pilot process, demonstrate the capabilities of the CBDC platform, and validate public sector and enterprise use cases.
Tether better embodies this "node value." Now, with the imminent launch of GELT, the digital token of the Georgian Larri, the country is taking another step forward in the fields of private stablecoin issuers and crypto payment infrastructure.
However, the cooperative structure of GELT, the way the government participates, the role of the central bank, and whether it constitutes a CBDC remain unclear. Roman Gotsiridze, the former governor of the National Bank of Georgia and a current opposition figure, told OC Media, adding that given the current government's history of "empty promises," people "seriously doubt whether it will actually happen."
Georgia, situated at the crossroads of Eurasia, possesses certain geographical advantages, but these merely act as amplifiers, not the answer itself. Its true value lies in the interface capabilities formed by the combination of geographical location and institutional tools.
Of course, this advantage also comes with the risks associated with being a small country. Georgia applied to join the EU in 2022 and gained candidate status in 2023, but due to the conflict between the Georgian government's political line and the EU's values and principles, its accession process effectively stalled in 2024. The Georgian government decided to postpone the suspension of the accession process until 2028.
For crypto businesses, this means that Georgia's institutional advantages are not risk-free assets; they can be affected by a combination of domestic politics, EU relations, and financial sovereignty disputes.
Therefore, Georgia's value to the crypto industry is more like a testing ground on the edge of the mainstream financial order: close enough to the formal system, yet small enough and flexible enough to accommodate localized experiments by crypto companies at a lower cost and with a shorter process.
