Tether Collaborates with U.S. Lawmakers to Shape Stablecoin Regulations

Tether, the largest issuer of stablecoins, is reportedly in discussions with U.S. Congressional lawmakers to help shape federal regulatory policies surrounding stablecoins. With a market capitalization surpassing $142 billion, Tether holds a dominant position in the stablecoin sector. The company has been working closely with House Financial Services Committee Chairman Bryan Steil and Congressman French Hill to influence the Stablecoin Tethering and Bank Licensing Enforcement (STABLE) Act, which was introduced on February 6.

In addition to its involvement with the STABLE Act, Tether has also been consulting on two other stablecoin-related bills introduced by other lawmakers. According to Tether CEO Paolo Ardoino, the company is committed to ensuring its voice is heard during the legislative process. Ardoino emphasized that while the company is prepared to adapt to U.S. regulations, it also remains uncertain about the future of stablecoin policies. "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," Ardoino stated.

As part of its compliance efforts, Tether is prepared to meet regulatory requirements that could include conducting monthly reserve audits through a U.S.-based accounting firm. The company would also need to maintain one-to-one collateral backing for its tokenized fiat equivalents, which would further align its operations with U.S. regulatory standards.

Tether's proactive involvement in the legislative process comes amid broader discussions within the cryptocurrency industry about regulatory clarity. Executives from the crypto sector have been meeting with the U.S. Securities and Exchange Commission (SEC) to address concerns over the industry's regulatory landscape. Additionally, there have been calls from the Trump administration to bring stablecoin operations onshore and bring more oversight to the industry.

The Federal Reserve’s Growing Interest in Stablecoins

The growing influence of stablecoins is not only on the radar of lawmakers but also the U.S. Federal Reserve. In a February 6 interview, Federal Reserve Governor Christopher Waller highlighted the importance of U.S.-pegged stablecoins in enhancing the global reach of the U.S. dollar. Waller noted that stablecoins could help solidify the U.S. dollar’s position as the world’s primary reserve currency.

Stablecoin issuers, such as Tether, have become some of the largest buyers of U.S. government debt. By using government securities to overcollateralize their fiat-backed tokens, stablecoin issuers are driving demand for the U.S. dollar. This, in turn, reinforces the dollar’s dominance in global capital markets.

However, while Waller acknowledged the potential benefits of stablecoins, he also expressed concerns about the risks they pose, particularly in terms of de-pegging events and the fragmentation of the stablecoin ecosystem. He emphasized the importance of regulatory oversight, suggesting that both banks and non-banks should be allowed to issue stablecoins, but they must work with state regulators to ensure compliance with existing regulations.

As Tether works with U.S. lawmakers navigate the evolving regulatory environment, it appears that the future of stablecoin policy is poised to play a pivotal role in the broader landscape of digital assets and global finance.