What to know:
- Tether led a $7 million Series A round in Pact Labs to expand USA₮ across payroll, lending, and payments.
- The investment targets the $11 trillion U.S. payroll market with faster blockchain-based wage settlements.
- Pact Labs has facilitated nearly $2 billion in on-chain loans and serves over 500,000 users.
Tether is expanding its U.S. stablecoin strategy after leading a $7 million Series A funding round in fintech infrastructure provider Pact Labs. The investment, which also included Blockchange Ventures and Lasagna, is aimed at scaling USA₮, Tether’s U.S.-focused dollar-backed stablecoin, across payroll, earned wage access, lending, and everyday payments.
The funding reflects the network’s broader strategy of moving stablecoins beyond crypto trading and into mainstream financial services by integrating them into the payment systems businesses and workers use every day.
Source: Tether
Also Read: Tether Invests $20M to Boost Mercado Bitcoin Growth in Brazil
Tether Backs Pact Labs to Modernize U.S. Payroll
The payroll system in America deals with over $11 trillion each year, but most of the systems that support this are based on batch processing technologies that were invented many decades ago. Employees have to wait for days before receiving money that they had already earned.
With the help of Pact Labs, the network seeks to make it possible for real-time payroll processing to be achieved through USA₮, giving employers the opportunity to carry out payment processing at any time of day.
“This confirms what our transaction data has shown for years: the demand for dollar-denominated settlement is a wages story,” said Tether CEO Paolo Ardoino.
He added that workers in emerging markets have long relied on stablecoins to bridge payroll gaps and that the company now plans to bring similar capabilities to the U.S. market.
Pact Labs Powers Tether’s U.S. Stablecoin Push
Pact Labs builds out infrastructure that allows fintechs to use blockchain-enabled payment rails without forcing their customers to directly use cryptocurrency.
The company claims it has been involved in over $2 billion worth of on-chain loan volume and has originated over $1 billion of loans and services for over 500,000 customers via seven fintechs.
Its platform supports blockchain networks including Aptos and Celo, enabling digital wallets, real-time payments, and blockchain-based lending behind the scenes.
This comes after Tether’s recent $100 million strategic investment in Anchorage Digital Bank that was made public earlier in the year. USA₮ is distributed via the platform built by Anchorage, which means that Pact Labs is yet another component in Tether’s plans for expansion into the United States.
Market Impact and What’s Next
The investments come amid heightened competition within the stablecoin industry. Circle is extending the reach of its USDC to institutions, while PayPal is gaining traction in PYUSD. Instead of going for trading, Tether has taken payroll as the market segment to capture within the United States.
The main thing to look out for here is how effectively the fintech relationships that Pact Labs has formed will lead to any significant uptake of USA₮.
If this investment proves effective, it could potentially give Tether a competitive advantage within the regulated stablecoin market in the U.S.
Also Read: Tether Bitcoin Reserve Shows Unusual Activity Following Q2 Close
This article contains market analysis and price predictions. These are not guarantees. Crypto markets are volatile. Always DYOR. Not financial advice.
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