Tether Eyes US-Only Stablecoin Launch if Donald Trump Delivers on Promised Reforms

Key Takeaways

• Tether is considering launching a U.S.-only stablecoin if Donald Trump delivers on his promises.
• CEO Paolo Ardoino confirmed talks with U.S. regulators on stablecoin regulations.
• Tether’s USDT was delisted from major EU exchanges after failing to meet MiCA standards.

Tether, the world’s largest stablecoin issuer, is contemplating the launch of a U.S.-focused stablecoin, contingent on the outcome of Donald Trump’s proposed crypto regulations.

CEO Paolo Ardoino revealed in a recent interview with Financial Times that the company is in discussions with U.S. regulators about potential rules surrounding stablecoins.

The conversations come amid two key proposals currently under review in Congress, which could impact Tether’s operations in the U.S.

Tether’s U.S. Strategy Hinges on Regulatory Changes

Ardoino indicated that Tether could launch a stablecoin exclusively for the U.S. market if regulatory changes align with the company’s needs.

The CEO’s statement follows Trump’s pre-election promise to establish crypto-friendly regulations, which have sparked optimism among Web3 firms and stablecoin issuers alike.

Currently, Tether’s flagship stablecoin, USDT, operates globally, but it faces challenges in complying with U.S. regulations.

The two bills under review in Congress, the STABLE Act and the GENIUS Act, are particularly relevant. Both bills emphasize transparency, consumer protection, and strict capital and liquidity standards for stablecoin issuers.

These proposed regulations would require reserves backing stablecoins to be held separately from the issuer’s proprietary assets, ensuring that only fully insured deposit institutions manage them.

The bills also seek to limit the activities of Payment Stablecoin Issuers (PSIs) to those directly related to stablecoin issuance, aiming to promote market stability.

If these bills pass, Tether’s current USDT model might not meet the requirements, leading to a potential overhaul. Ardoino hinted that the only viable solution could be the creation of a new stablecoin tailored to U.S. regulations.

Troubled Past and Market Dominance

USDT, which holds a dominant 70% market share, is widely used in the crypto market. However, its past has been marred by controversies, particularly regarding the transparency of its reserves.

Tether has long claimed that its stablecoin is backed primarily by cash or cash equivalents like treasury bills.

A portion of its reserves is also backed by Bitcoin, an asset that could pose regulatory concerns if stricter rules become effective.

Government regulations typically require stablecoin reserves to be backed by assets with stable value, and Bitcoin’s volatility raises questions.

Despite these claims, Tether has not undergone third-party audits in over six years, leaving some uncertainty about the full backing of its issued stablecoins. This lack of oversight has raised doubts among critics and regulators alike.

In addition, Tether’s USDT was recently delisted from several major European exchanges after failing to meet the standards under the European Union’s Markets in Crypto Assets (MiCA) regulations.