Tether Influences U.S. Stablecoin Regulations Amid Policy Uncertainty

• Tether is lobbying U.S. lawmakers to shape stablecoin regulations and ensure its dominance amid increasing scrutiny.
• New bills demand stricter audits, pushing Tether to enhance transparency while advocating for fair compliance rules.
• Tether’s U.S. Treasury holdings highlight its financial influence, making its role in stablecoin policy crucial.

According to Eleanor Terrett, Tether aggressively collaborates with US legislators to influence future rules. The stablecoin holds 60% of the $230 billion stablecoin market and is dealing with increasing scrutiny. Lawmakers in the US are attempting to establish a framework that would reinterpret stablecoin compliance. As a result, Tether aims to change these laws in order to maintain its position in the US market. The company’s dedication to changing while making its voice heard is reaffirmed by CEO Paolo Ardoino.

Tether’s Regulatory Strategy

Tether has long faced criticism for its lack of full audits, opting instead for quarterly financial assessments by global accounting firm BDO. However, U.S. lawmakers are now advancing multiple stablecoin bills that demand increased transparency. Notably, the STABLE Act, introduced by Congressman Bryan Steil and French Hill, proposes mandatory monthly audits by a U.S. accounting firm.

Besides this, Republican Senator Bill Hagerty and Democratic Congresswoman Maxine Waters have also proposed competing bills. These regulations could impose stringent reserve requirements, ensuring stablecoins maintain a one-to-one backing with pre-approved assets.

Ardoino acknowledges the uncertainty but affirms Tether’s willingness to comply. However, he stresses the importance of influencing legislative decisions to ensure the framework remains fair.

Tether’s Expanding Role in U.S. Finance

Tether now has more than $114 billion in U.S. short-term Treasury bills, making it one of the biggest holders. This demonstrates the company’s substantial financial clout and reinforces its position in international finance.

Moreover, lawmakers recognize Tether’s economic impact, prompting increased engagement with the firm. Congressman Steil confirmed to Fox Business that Tether has been actively discussing the STABLE Act draft. Given the bipartisan interest in stablecoin regulation, an official bill could be signed into law as early as April.

The Path Forward for Stablecoin Regulation

While Congress considers its strategy, the stablecoin industry seeks legislative certainty. Crucially, Tether will need to increase transparency and function under more stringent financial supervision in order to comply.

The exact regulations are still unknown, though, as several measures are still being reviewed. Tether’s interaction with legislators may influence the result, resolving financial stability issues and guaranteeing the industry’s sustainability.