The world’s most traded cryptocurrency, Tether, is to offer a US-only stablecoin if the US administration under Donald Trump brings regulations to promote market inclusion. The Tether chief executive has conducted discussions with the administration about stablecoin rules in the country, which considers them an important asset for the US.
Following the introduction of guidelines under the US administration about stablecoins, the Tether chief executive, Paolo Ardoino, considers introducing a US-only Stablecoin. He revealed that the US administration saw stablecoins as an important instrument for the country, and if rules align as expected, Tether could create a token just for the US broad market.
Currently, $144 billion Tether tokens are circulating in the crypto market, but none are available for customers in the US. This is because of the existing lawsuit between Tether and the SEC, which alleges that Tether violated anti-money laundering and sanctions rules.
Though Tether is widely used in crypto markets, according to the Securities and Exchange Commission, they are the preferred cryptocurrency for criminal activities. However, Tether denied the claim.
Since Trump returned to the US administration, many regulations and amendments have been introduced in the country, mostly favoring the US crypto. Aligning with his promise to make the US ‘the world’s crypto capital’, he has called for new stablecoin rules to be implemented by August.
Tether To Make Use Of The Changing Crypto Wave In The US
With the Donald Trump administration, crypto rules have become more friendly in the United States. Under Mark Uyeda, the acting chairman of the SEC, many cases against cryptocurrency companies have been stopped or halted, increasing the confidence of projects in US crypto markets.
Tether is a key buyer of the US government debt, the prominent leader of the crypto industry invests the held reserves against its coins in US treasuries and utilizes those interests to pay bonds. With a high US interest rate, Tether raised its net profits to $13 billion last year.
The Tether chief executive has revealed that if the new rules on stablecoins become competitive, Tether will introduce a new stablecoin in the US, functioning more like a settlement currency rather than a security.
Also Read: US House Committee Has Approved Stablecoin-Regulating STABLE Act
Tether’s New Stablecoin Plan Comes Amid SEC’s Latest Guidelines On Stablecoin
The SEC has issued new guidelines for stablecoins, cryptocurrencies that are pegged to real-world assets like the dollar. Under the latest guidelines, fully backed and dollar-pegged stablecoins can only be used for payments and value transfers and will not be considered as securities.
SEC has clarified that the assets classified under ‘covered stablecoins’ don’t fall under investments; rather, they are traded as a reliable, quick, stable, and accessible mode of transferring value. Being only a means of transfer, they can’t offer profits, interests, ownership rights, or stakes.
The guidelines create a doubt on Tether’s qualification as a stablecoin, as it excludes reserves that involve crypto assets or precious metals, and Tether includes both as part of its USDT’s backing.
Since Tether fails to qualify as a stablecoin, its plans to introduce a new stablecoin backed by cash and US treasuries highlight its strategies to expand its market in the broader US crypto market.