The STABLE Act : What’s Next For Tether And The Crypto Market ?

The regulations surrounding stablecoins are no longer a distant threat for crypto issuers. They are now an unavoidable reality. In this uncertain climate, Tether, the sector leader with a market capitalization exceeding 142 billion dollars, has chosen not to remain a spectator. Rather than opposing American lawmakers head-on, the company is seeking to influence the regulatory process. A strategic choice that could redefine the future of stablecoins and the entire crypto market in the United States.

Tether enters the legislative arena

For years, Tether has been operating in a regulatory gray area, juggling between criticized lack of transparency and massive adoption of its USDT as a global standard. In the face of increasing legislative pressure in the United States, the company has decided to actively participate in discussions on future stablecoin regulation. According to information reported by Fox Business, Tether is collaborating with American lawmakers, particularly Representatives Bryan Steil and French Hill, to influence the STABLE Act, a key law in the regulation of the sector.

The CEO of Tether, Paolo Ardoino, emphasized his company’s position: “We do not intend to abandon the American market. There are still many uncertainties about what will happen, and we want our voice to be heard in this legislative process.” Therefore, Tether’s objective is clear: not to let regulators define the rules of the game alone, but rather to shape a framework that allows the company to remain competitive in the American market while meeting new legal requirements.

Strategic Issues and Risks for Tether

If Tether’s involvement in legislative discussions indicates a change in posture, it also highlights the challenges ahead for the company. Indeed, complying with American requirements will not be without consequences. One of the key measures proposed by the STABLE Act mandates monthly audits of Tether’s crypto reserves by an accounting firm based in the United States, a major constraint for a company that has regularly been criticized for the transparency of its reserves.

Beyond constraints, the question of competition among stablecoin issuers arises. Christopher Waller, Governor of the Federal Reserve, believes that stablecoins “will expand the reach of the US dollar globally and strengthen its status as a reserve currency.” Such a vision potentially opens the door to the issuance of dollar-backed stablecoins by traditional banking institutions, thus putting Tether in unprecedented competition. If major banks enter the race for stablecoins, Tether’s monopoly could be called into question, especially if institutional investors favor more regulated alternatives.

The future of Tether in the United States will depend on its ability to comply with new rules without losing its competitive advantage. On one hand, playing the game of crypto regulation could offer it unprecedented legitimacy, which would reassure institutions and regulators. On the other hand, the opening of the market to traditional banking actors could weaken its hold on the crypto ecosystem. The showdown between regulators and Tether is just beginning, and its outcome will determine the future of USDT as well as that of the entire stablecoin market.