- Coinbase CEO warns Tether could face delisting under new U.S. stablecoin laws.
- The proposed regulations aim to ensure full reserves and frequent audits of stablecoins.
- Circle’s USDC aligns with rules, while Tether resists stricter compliance standards.
Brian Armstrong revealed the exchange might remove Tether if U.S. legislation requires stricter stablecoin regulations. Speaking at the World Economic Forum in Davos, Switzerland, Armstrong emphasized the importance of compliance with potential laws mandating 100% reserve backing in U.S. Treasury bonds and regular audits for stablecoin issuers. Armstrong told Charles Forelle of The Wall Street Journal,
“There are a lot of people with Tether, and we want to give them an off-ramp to transition into a system that we think is more secure.”
Regulatory Pressure Builds Around Tether
USDT, the world’s most traded stablecoin, faces growing scrutiny over its reserve transparency. Established in the British Virgin Islands, it has yet to release audited monetary statements, creating oversight challenges.
Meanwhile, Circle, the issuer of USDC , has embraced legislative frameworks. It complies with existing laws and supports mandates for reserve transparency. Coinbase, an investor in Circle, encourages its customers to transition to USDC to align with evolving legal requirements.
Armstrong’s comments follow Coinbase’s decision to halt Tether trading in Europe, citing EU regulations. These rules demand stablecoin issuers maintain reserves exclusively in liquid assets, including Treasury bonds, which Tether opposes.
U.S. Legislative Focus Intensifies on Stablecoins
Two proposed U.S. bills aim to regulate stablecoins, including one that could bar offshore issuers like Tether from operating domestically. Republican Representative Tom Emmer has prioritized comprehensive legislation addressing stablecoins and cryptocurrency market structures.
Emmer, vice chairman of the House Subcommittee on Artificial Intelligence, Financial Technology, and Digital Assets, stated that pro-crypto legislation could gain momentum in a Republican-controlled Congress.
The Payment Stablecoin Act, introduced by Senators Cynthia Lummis and Kirsten Gillibrand, seeks to reinforce the U.S. dollar’s global reserve currency status by standardizing stablecoin issuance. The legislation would require issuers to hold reserves entirely in U.S. Treasury bonds and undergo frequent audits.
Related: Rajasthan Cybercriminals Funnel Money Through Tether (USDT)
Trump Token’s Rise and Its Implications
Surprisingly, the Trump token ($TRUMP) has gained traction with its price surging to $32 FDV. Coinbase added the token to its platform, leveraging its popularity through listings and high trading volumes.
President Donald Trump has also underscored the role of cryptocurrencies in his policy agenda for a potential second term. These developments, alongside legal shifts, reflect the evolving situation for stabilized coins and digital assets in the country.
