- Tether, the world’s largest stablecoin issuer, is planning to pivot and introduce a brand-new stablecoin specifically for U.S. users.
- The move from Tether comes just as the US Congress races to finalize its STABLE Act in the House and the GENIUS Act in the Senate.
- With the U.S. and Europe tightening the screws, Tether is becoming backed into a corner to make its operations future-proof.
Tether, the world’s largest stablecoin issuer, is planning on making a major move, especially as US lawmakers push forward with new legislation. The company is looking towards a possible limit on its access to the US market.
However, rather than back away, Tether is planning to pivot and may even introduce a brand-new stablecoin specifically for U.S. users. Let’s see what Tether CEO Paolo Ardoino has to say and what this new stablecoin might entail.
What’s Happening and Why It Matters
USDT, Tether’s flagship stablecoin, has been the dominant stablecoin across the global market. This stablecoin is designed to provide dollar stability to users, especially in regions where traditional banking isn’t as accessible or even reliable. CEO Paolo Ardoino says US market needs differ, requiring a unique solution.
Ardoino believes that the main stablecoin works well for major markets. However, if push comes to shove, Tether can find a workaround that works for the US in particular. This would mean that Tether could be looking towards offering separate products. USDT for high-speed and high-volume users from around the world (as usual) , and a new U.S.-compliant stablecoin, which will be tailored to meet local laws under the Bank Secrecy Act (BSA)
U.S. Lawmakers Push Forward with New Rules
The most recent move from Tether comes just as the US Congress races to finalize its new stablecoin laws. There are currently two competing bills: the STABLE Act in the House and the GENIUS Act in the Senate, both of which aim to tighten oversight of the stablecoin industry. Both bills demand stricter AML compliance and audits from foreign issuers like Tether.
A key sticking point is the application of the Bank Secrecy Act, which critics have argued would unfairly exclude foreign players. Meanwhile, Tether finds itself at the center of this controversy, over whether it truly has the reserve funds to back its USDT tokens. Despite its previous efforts to improve transparency, the company has still not completed a full audit by a major accounting firm.
Despite the criticism over its (possible) lack of reserves, the company’s CEO maintains that Tether operates with strict compliance. He claims that the company works closely with law enforcement agencies around the world, and is therefore well-backed.
The Issues In Europe
As it stands, the US isn’t the only country ramping up its regulations. For example, the European Union recently enacted its own stablecoin rules under the Markets in Crypto-Assets (MiCA) framework. As a result, Binance was forced to delist USDT and several other stablecoins from its European platforms.
Ardoino says Tether backs local projects for EU-compliant dollar and Euro stablecoins. Meanwhile, amid all this legislative activity, the SEC recently stepped in with a new stance on stablecoins, according to CNBC.
According to the agency, so-called “covered stablecoins,” or those fully backed by low-risk and pegged 1:1 to the U.S. dollar, are not considered securities. However, this rule only applies if the issuer doesn’t offer interest payments to users.
In essence, with the U.S. and Europe tightening the screws, Tether is becoming backed into a corner to make its operations future-proof. Will Tether’s charge be challenged soon? Will US users be seeing a new flavor of Tether-backed USDT tokens?
