Journalist
Posted:
- Tether collaborates with U.S. lawmakers to influence stablecoin regulations and ensure compliance.
- SEC reviews digital asset ETFs, including XRP, SOL, and DOGE, amid regulatory developments.
Tether, the largest stablecoin issuer, is reportedly engaging with U.S. lawmakers to shape federal stablecoin regulations.
The company is working alongside Representatives Bryan Steil and French Hill on the STABLE Act, introduced on the 6th of February, while also providing input on other proposed stablecoin legislation.
Tether CEO weighs in
Remarking on the same, Tether CEO Paolo Ardoino emphasized the company’s commitment to contributing to the evolving regulatory framework and said,
“We are going to work within the regulatory framework, and we are going to try to advise on every single one of these field proposals to make sure that our voice is heard.”
Needless to say, the legislation aims to tighten stablecoin regulations by mandating issuers to maintain reserves solely in high-quality, liquid assets such as U.S. Treasury bills and insured deposits.
JPMorgan on the upcoming challenges
As the dominant player in the stablecoin market, Tether currently holds over $114 billion in short-term Treasury bills.
However, JPMorgan analysts suggest that regulatory changes could force the company to offload portions of its Bitcoin [BTC] and precious metals reserves to ensure compliance.
Additionally, the proposed framework would require Tether to transition from quarterly assessments by BDO to monthly audits by a U.S.-based accounting firm, ensuring that all reserves align one-to-one with regulator-approved assets.
However, Ardoino has pushed back against these claims, arguing that JPMorgan’s assessment reflects a misunderstanding of the company’s financial operations and the broader regulatory landscape.
He added,
“We are not going to just throw in the towel and let Tether die just for the sake of not adapting to U.S. legislation. But there is still a lot of uncertainty over what’s actually going to happen, and we want our voice to be heard in the legislative process.”
Role of stablecoins in strengthening US dollar dominance
Amidst this, Federal Reserve Governor Christopher Waller’s remarks highlight the growing role of U.S.-pegged stablecoins in strengthening the dollar’s global dominance.
He acknowledged,
“Will broaden the reach of the dollar across the globe and make it even more of a reserve currency than it is now.”
By using government securities to collateralize their tokens, stablecoin issuers have become key players in sustaining demand for U.S. debt, reinforcing the dollar’s position as the global reserve currency.
While Waller supports allowing both banks and non-banks to issue stablecoins under regulatory oversight, he also acknowledged the risks posed by de-pegging events and a fragmented stablecoin market.
Other crucial developments in the U.S. crypto ecosystem
Interestingly, his comments coincide with another major regulatory development, as the U.S. SEC is currently reviewing multiple digital asset ETFs, including those tied to Ripple [XRP], Solana [SOL], and Dogecoin [DOGE].
Expressing on which, Eleanor Terret put it best when she said,
“They have *acknowledged* that issuers are applying for a product that classifies XRP a commodity asset within a securities wrapper (the securities wrapper is the ETF itself), the same as $BTC and $ETH.”
Therefore, as stablecoins and digital assets gain mainstream attention, regulatory clarity will be crucial in shaping the future of the crypto industry and its integration with traditional financial markets.
