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Tether Engages with U.S. Lawmakers to Shape Stablecoin Legislation
Tether, the world’s largest stablecoin issuer, has been in talks with U.S. lawmakers to influence the development of stablecoin regulations in the country. According to recent reports, the firm has been actively engaging with Rep. Bryan Steil and Republican Chair of the House Financial Services Committee, French Hill, regarding the discussion draft for the new STABLE Act.
Understanding the STABLE Act
The proposed legislation, also known as the Stablecoin Transparency and Accountability for a Better Ledger Economy Act, aims to regulate stablecoin issuers by requiring them to obtain permission from the Office of the Comptroller of the Currency. Additionally, stablecoin issuers would need to back their cryptocurrencies with traditional fiat currency, short-term U.S. Treasury bills, or central bank reserves.
“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.”
Tether’s CEO, Paolo Ardoino, has expressed the firm’s commitment to complying with U.S. regulations, regardless of the outcome. If the STABLE Act is passed, Tether would need to maintain one-to-one asset backing for its tokenized fiat and conduct monthly reserve audits through a U.S.-based accounting firm.
Transparency Concerns and Regulatory Compliance
Tether has faced criticism for its lack of transparency, particularly regarding the absence of a full audit. Instead, the firm provides quarterly reports from its financial books published by global accounting firm BDO. JP Morgan analysts predict that Tether may need to sell some of its Bitcoin holdings to comply with the new requirements, citing that the stablecoin firm only has 66% to 83% of the required amount to back its crypto supply.
Shaping Regulatory Frameworks
Ardoino emphasized the importance of Tether’s involvement in shaping regulatory frameworks for stablecoins in the U.S. The firm aims to ensure that its voice is heard in the legislative process and to advise on every single field proposal.
Recent Stablecoin Bills and Regulatory Developments
In the past week, three stablecoin bills have been introduced in the House and the Senate, including the GENIUS Act and a proposal for stablecoin oversight involving the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the Federal Reserve. Federal Reserve Governor Christopher Waller has also expressed support for a regulatory framework that addresses stablecoin risks and enables banks and non-banks to issue stablecoins.
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