Tether Engages U.S. Lawmakers to Shape Stablecoin Regulations

The STABLE Act, introduced on February 6, has sparked significant discussions in the cryptocurrency industry, particularly around stablecoin regulations. Tether, the largest stablecoin issuer, is actively engaging with U.S. lawmakers to shape federal stablecoin regulations. The company is working alongside Representatives Bryan Steil and French Hill on the STABLE Act, while also providing input on other proposed stablecoin legislation.

Tether CEO Paolo Ardoino emphasized the company's commitment to contributing to the evolving regulatory framework. He stated, "We are going to work within the regulatory framework, and we are going to try to advise on every single one of these field proposals to make sure that our voice is heard." The legislation aims to tighten stablecoin regulations by mandating issuers to maintain reserves solely in high-quality, liquid assets such as U.S. Treasury bills and insured deposits.

As the dominant player in the stablecoin market, Tether currently holds over $114 billion in short-term Treasury bills. However, regulatory changes could force the company to offload portions of its Bitcoin and precious metals reserves to ensure compliance. The proposed framework would also require Tether to transition from quarterly assessments by BDO to monthly audits by a U.S.-based accounting firm, ensuring that all reserves align one-to-one with regulator-approved assets.

Ardoino pushed back against claims that Tether would struggle to adapt to U.S. legislation. He argued, "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. But there is still a lot of uncertainty over what’s actually going to happen, and we want our voice to be heard in the legislative process."

Amidst these developments, Federal Reserve Governor Christopher Waller's remarks highlight the growing role of U.S.-pegged stablecoins in strengthening the dollar's global dominance. He acknowledged, "Stablecoins will broaden the reach of the dollar across the globe and make it even more of a reserve currency than it is now." By using government securities to collateralize their tokens, stablecoin issuers have become key players in sustaining demand for U.S. debt, reinforcing the dollar's position as the global reserve currency.

Waller supports allowing both banks and non-banks to issue stablecoins under regulatory oversight, but also acknowledged the risks posed by de-pegging events and a