Key facts
- Tether led a $7 million Series A investment in Pact Labs.
- The investment aims to expand the adoption of Tether's USAT stablecoin in the US payroll sector.
- Pact Labs will integrate USAT into enterprise payroll platforms for real-time wage payments.
- The US payroll market processes over $11 trillion annually.
- Tether is also pursuing international expansion, with Bolivia considering USDT integration.
Tether, the issuer of the USDT stablecoin, is intensifying its efforts to penetrate the U.S. financial system by investing in payroll infrastructure provider Pact Labs. Tether has spearheaded a $7 million Series A funding round for Pact Labs, with participation from Blockchange Ventures and Lasagna. This strategic move is intended to bolster the adoption of USAT, Tether's U.S. dollar-backed stablecoin, within the substantial U.S. payroll sector, which handles over $11 trillion in payments annually.
The partnership aims to integrate USAT into the payroll platforms of American businesses, enabling real-time wage payments through blockchain-based infrastructure, bypassing traditional payment systems. Pact Labs will also facilitate the embedding of digital wallets and enhance access to financial services. Tether executives view the payroll system as a prime real-world application for stablecoins, citing consistent demand for dollar-based settlement in wage payments. Currently, much of the U.S. payroll infrastructure relies on legacy networks, leading to delays in wage disbursement that can cause financial strain for employees.
Tether believes that blockchain technology can significantly reduce these inefficiencies, allowing for round-the-clock payroll processing. This expansion into the U.S. payroll market coincides with Tether's global growth initiatives, including reports that Bolivia is considering integrating USDT into its national payment system. These developments represent significant progress for Tether, particularly after its exit from EU markets due to the MiCA regulations. Meanwhile, the stablecoin industry faces scrutiny regarding potential loopholes in the CLARITY Act, which has fueled concerns and impacted the stock price of entities like Circle. Despite regulatory headwinds, Tether's payroll integration is seen as a major long-term growth opportunity and a step towards improving institutional confidence.