Thomas Daniels
If future U.S. legislation require it, Coinbase, the biggest cryptocurrency exchange in the country, has indicated that it is prepared to delist Tether (USDT), the stablecoin with a market value of $138 billion. Coinbase CEO Brian Armstrong stated in a Wall Street Journal article that possible laws under the Biden administration would mandate that stablecoins keep all of their deposits in U.S. Treasury bonds and submit to regular audits for increased consumer safety and transparency.
Previous Regulatory Measures and Industry Adherence
This is not the first time that Coinbase has delisted Tether. Due to USDT’s violation with the EU’s Markets in Crypto-Assets (MiCA) regulatory framework, the business had already withdrawn it from its European platform. Even after being removed, Tether continues to dominate the worldwide cryptocurrency market, surpassing rivals such as Circle’s USDC and the more recent arrival Ripple USD.
According to Tether’s issuer, 80% of its holdings are U.S. Treasury Bills, which are the main source of support for the stablecoin. The independent accounting company BDO Italia provides quarterly financial attestations in an effort to increase transparency in the wake of the 2022 cryptocurrency market turmoil, which revealed a number of insolvent players, including FTX and Three Arrows Capital. These attestations, however, are not complete audits, which results in continued doubt on USDT’s reserves.
Difficulties for Tether and Possible Law
Tether’s reporting processes, according to critics, might not adhere to the more stringent regulations anticipated in the United States. The majority of the stablecoin’s activities are concentrated in developing nations outside of North America and Europe, where its use is most prevalent. Additionally, El Salvador, the first nation to accept Bitcoin as legal cash, will host the company’s global headquarters.
It is also unclear if Tether will abide by prospective US laws that would mandate more stringent financial reports and audits. Its market position may be greatly impacted by this, particularly if global regulatory scrutiny increases.
Repercussions for the Crypto Sector
Along with more regulatory monitoring, the possibility of USDT being delisted from Coinbase underscores how stablecoin regulation is changing. It emphasizes how crucial responsibility, transparency, and compliance are to maintaining consumer and business trust in digital assets.
