Tether, the world’s largest stablecoin issuer, has ramped up efforts to play a significant role in shaping U.S. stablecoin regulations. The company has been actively engaging with lawmakers behind the STABLE Act, a proposed bill aimed at increasing transparency and accountability for stablecoins.
According to FOX Business reporter Eleanor Terrett, Tether has been in discussions with Rep. Bryan Steil and Republican Chair of the House Financial Services Committee, French Hill, regarding the legislation. These lawmakers confirmed that Tether has been closely involved in discussions about the new bill, the Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE Act).
The bill, still in its draft stage, proposes that stablecoin issuers obtain permission from the Office of the Comptroller of the Currency (OCC) and back their crypto with traditional fiat currency, short-term U.S. Treasury bills, or central bank reserves.
Tether’s Commitment to Compliance
Tether CEO Paolo Ardoino has made it clear that the company is committed to complying with U.S. regulations, regardless of the final outcome of the STABLE Act. He stated, “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.”
If the STABLE Act is passed, Tether will need to adhere to strict requirements, including maintaining a one-to-one backing for its tokenized fiat and conducting monthly reserve audits through a U.S.-based accounting firm.
Transparency Concerns and Potential Bitcoin Sales
Tether has faced criticism over its lack of transparency, especially regarding its reserves. Unlike some competitors, Tether has not undergone a full audit. Instead, the firm releases quarterly reports of its financial books, verified by global accounting firm BDO.
However, Tether’s potential compliance with the new bill could come with challenges. Analysts at JP Morgan predict that Tether may need to sell some of its Bitcoin holdings to meet the new requirements. The firm currently holds between 66% and 83% of the required amount to back its stablecoin supply with the appropriate assets.
Shaping U.S. Stablecoin Policy
Ardoino emphasized that Tether’s aim is to be an active participant in the development of all U.S. stablecoin regulations. He stated, “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.”
In the past week alone, three different stablecoin bills have been introduced in the U.S. Congress. Along with the STABLE Act, which is gaining significant attention, the GENIUS Act has also been introduced. This bipartisan bill, led by Sen. Cynthia Lummis, regulates stablecoins with a market cap of over $10 billion.
Additionally, Democratic Rep. Maxine Waters introduced a proposal for stablecoin oversight that would involve the OCC, the Federal Deposit Insurance Corporation (FDIC), and the Federal Reserve.
The Future of Stablecoins in the U.S.
Federal Reserve Governor Christopher Waller recently expressed that stablecoins could strengthen the U.S. dollar’s dominance on a global scale. However, he acknowledged that the stablecoin market is still in need of a comprehensive regulatory framework to address its associated risks.
Waller’s statements echo sentiments from Fed Chairman Jerome Powell, who, during a meeting with the House Financial Services Committee last year, showed full support for establishing a stablecoin regulatory framework.
With Tether pushing for a say in the regulatory process, the coming months could see significant changes for stablecoins in the U.S. market, as lawmakers seek to create a more transparent and accountable environment for digital assets.
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