Tether Aims to Play a Part in U.S. Stablecoin Regulations
Tether is currently engaging with U.S. lawmakers in relation to the STABLE Act, aiming to play a significant role in the development of U.S. stablecoin regulations.
As reported by FOX Business’ Eleanor Terrett, Tether (USDT) has been in conversations with Rep. Bryan Steil and French Hill, the Republican Chair of the House Financial Services Committee, concerning the regulations surrounding stablecoins in the U.S.
Both Steil and Hill confirmed to Terrett that Tether, the largest stablecoin issuer globally, has been actively involved in discussions regarding the new bill, titled Stablecoin Transparency and Accountability for a Better Ledger Economy, or STABLE Act.
This legislation is expected to mandate that stablecoin issuers obtain approval from the Office of the Comptroller of the Currency and ensure that their cryptocurrencies are backed by traditional fiat currency, short-term U.S. Treasury bills, or central bank reserves.
CEO Paolo Ardoino expressed that the company intends to align with U.S. stablecoin regulations, regardless of how they evolve.
“We are not going to simply give up on Tether for the sake of avoiding adaptation to U.S. legislation,” Ardoino stated.
This indicates that should the STABLE Act be enacted, Tether must commit to maintaining a one-to-one backing of assets for its fiat-denominated token and undergo monthly reserve audits by a U.S.-based accounting firm.
https://twitter.com/EleanorTerrett/status/1890537406878871747
As noted by Terrett, Tether has faced criticism for its perceived lack of transparency, particularly due to claims that the company has never undergone a complete audit. Currently, the stablecoin issuer publishes quarterly financial reports compiled by the global accounting firm BDO.
Moreover, analysts at JP Morgan anticipate that Tether may need to liquidate part of its Bitcoin (BTC) holdings to meet the new regulatory requirements, citing that the firm only has between 66% to 83% of the necessary backing for its crypto assets.
Ardoino highlighted that his team is dedicated to participating in the formulation of all regulatory frameworks pertaining to stablecoins within the U.S. to ensure their perspectives are included in the legislative process.
“We are committed to engaging within the regulatory environment and offering input on every proposed measure to ensure our voice is recognized,” Ardoino declared.
In the past week, three stablecoin-related bills have been introduced in both the House and Senate. In addition to the STABLE Act, there is the GENIUS Act, a bipartisan bill from the Senate, which includes contributions from Senator Cynthia Lummis, known for her Bitcoin reserve proposal. This bill focuses on regulating stablecoins with market capitalizations exceeding $10 billion.
Additionally, Democratic Rep. Maxine Waters of the House Financial Services Committee proposed oversight mechanisms for stablecoins, involving the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the Federal Reserve.
On February 13, Federal Reserve Governor Christopher Waller stated that stablecoins could enhance the global dominance of the U.S. dollar, but emphasized the need for a regulatory framework that appropriately addresses risks associated with stablecoins and allows both banks and non-banks to issue these coins.
Similarly, last year, Fed Chairman Jerome Powell expressed strong support for the establishment of a stablecoin regulatory framework during a meeting with the House Financial Services Committee.