Coinbase has expressed its willingness to delist Tether’s stablecoin from its platform if required by future U.S. regulations under President Donald Trump. According to The Wall Street Journal, Brian Armstrong, CEO of Coinbase, stated that the largest U.S. cryptocurrency exchange could remove the $138 billion dollar-pegged stablecoin, Tether (USDT), should new U.S. laws mandate such action.
Regulatory Predictions and Stablecoin Laws
Armstrong suggested that stablecoin regulations in the U.S. could enforce strict requirements, including mandates to hold all reserves in Treasury bonds and conduct regular audits to ensure customer protection. Coinbase has already acted in this direction by delisting Tether from its European platform for noncompliance with the EU’s MiCA framework, which outlines specific regulations for the crypto industry.
Tether’s Dominance and Compliance Issues
Tether, the dominant stablecoin in the crypto market, ahead of competitors like Circle’s USDC, has faced scrutiny over its reserve management. The operator of USDT claims to hold **80% of its reserves in Treasury bills (T-Bills), and publishes financial attestations issued by BDO Italia, an independent third-party accounting firm. These attestations became standard practice following the 2022 market collapse, which revealed insolvency issues in firms like FTX and Three Arrows Capital. While these updates have alleviated some concerns, critics argue they do not constitute full audits.
Future Compliance and Tether’s Global Presence
It remains uncertain whether Tether would comply with more rigorous U.S. legislation requiring detailed audits. Notably, Tether’s operations primarily target emerging markets outside the U.S. and Europe. The company also plans to relocate its global headquarters to El Salvador, the first nation to legalize Bitcoin, indicating its shifting focus towards markets with less stringent regulatory frameworks.
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