According to CEO Brian Armstrong, Coinbase will delist Tether’s USDT stablecoin if forced by the new law. Several current efforts to change cryptocurrency laws in the United States could affect the company, but there has been no significant progress.
Currently, Tether has encountered a minor setback from the EU’s MiCA law, but if the United States makes a similar effort, Tether’s operations could be severely disrupted.
US Law Changes Could Challenge Tether
Brian Armstrong, CEO of Coinbase, has strongly opposed the previous government crackdown on cryptocurrency. This exchange has faced many major challenges from the SEC under Gensler’s leadership.
Although a US court sided with the company in its lawsuit with the SEC, the CFTC issued a subpoena against the company. Additionally, Armstrong has accused the FDIC of withholding important documents.
However, the exchange has welcomed positive changes in management under the new government. Armstrong confirm that Coinbase will remove Tether’s USDT if forced to.
“There are a lot of owners [USDT]and we want to provide them with a solution, if we want to help them move to a system that we think is more secure,” Armstrong said.
Armstrong added that US lawmakers could force Tether and other stablecoin issuers to keep their reserves in US Treasury bonds and undergo regular audits. Tether keeps the majority of its reserves in Treasury bonds, but also maintains reserves in commodities such as Bitcoin or gold.
This issue has also caused significant challenges for USDT in the EU under the new MiCA regulation. Armstrong predicts that a similar problem could occur with Tether in the future. In this case, he will cooperate with delisting requests, just as EU exchanges have done.
Furthermore, Coinbase is a major shareholder of Circle, a smaller stablecoin that has challenged Tether’s dominance in the European market.
“The stablecoin market is worth $218.7 billion, and this move could be a game-changer, especially as the United States is pushing to keep the dollar at the top. This could be the beginning of big changes for Tether and its competitors,” Mario Nawfal post on X (formerly Twitter).
In other words, although the US is moving towards a new pro-crypto regulatory framework, enforcement actions are still possible, especially against non-US crypto entities.
Armstrong said the Senate has introduced two bills that would impose these limits on Tether, but neither has progressed. Although Tether recently moved to El Salvador, it still needs the US market.
Ultimately, it is difficult to predict whether these regulations are likely to pass. The US crypto space is calling for a comprehensive new regulatory framework, which will almost certainly affect Tether.
Armstrong wanted to point out that Coinbase is willing to cooperate with this regulatory framework, even if it marginalizes Tether.