In the latest article from the Wall Street Journal, Coinbase CEO Brian Armstrong did not miss the opportunity to take cheap trades on Tether, generating an unjustified wave of FUD against the company and USDT, the world’s largest stablecoin. For now, these are just words on the wind, as the necessary elements to judge the company’s compliance with potential new US regulations do not yet exist.
What does all this mean for USDT?
Let’s see all the details below.
Brian Armstrong is willing to delete USDT if necessary: It’s FUD on Tether immediately
A few days ago, the Wall Street Journal published an article condition Where unjustified FUD (Fear, Uncertainty, and Doubt) has been spread around Tether and its stablecoin USDT. The newspaper reported how Brian Armstrong, CEO of the Coinbase exchange, would be prepared to delist the currency if necessary.
The motivation behind this powerful statement lies in… The possibility that the United States will begin to adopt a more stringent regulatory framework in the field of stablecoins. In this case, if Tether fails to comply with potential new regulations, Coinbase may be forced to make difficult decisions.
In fact, USDT represents the most liquid and widespread stablecoin in the cryptocurrency world, with a strong presence on major trading pairs on exchanges. to coinbase, to cross out pregnancy The coin means giving up the presence of a product that is widespread and highly appreciated in the sector.
In any case, the policy of complying with US laws will leave Coinbase no other option but to delist, should USDT fail to comply. Armstrong’s remarks about the possibility of such a situation came just a month after USDT was delisted from European territory due to the uncomfortable effects of MiCA.
However, the CEO of the cryptocurrency exchange confirmed that they will continue to offer USDT services to customers to facilitate their transition to other compatible assets.
Here’s what Armstrong said regarding the Tether issue:
“There are a lot of people who use tethering and we want to offer them a way out, if we want to help them switch to a system that we think is safer.”
Potential change in the regulatory landscape for stablecoins in the USA
Coinbase believes that the US government will soon enact a new stablecoin reform that will have negative implications for Tether and USDT. Under the new Trump administration, it is believed that so Two bills will be approved that would require stablecoin issuers to hold US Treasury securities.
In particular, in this context, the bipartisan bill published by senators Cynthia Loomis and Kirsten Gillibrand are called “Stablecoin payment law“Finds Its Place. It is a regulatory framework that aims to set clear rules for stablecoins, with the aim of protecting investors and promoting digital innovation.
Inside it is clearly stated how all those currencies that do not have a 1:1 collateral with deposits in US bonds will be banned. Furthermore, the bill includes measures to ban algorithmic stablecoins and prevent illicit use through external channels.
As Armstrong understood, this evolution in the regulatory landscape may be occurring Negative effects on Tether. Coinbase may side with regulators and remove USDT even in the US, after cutting ties with European markets.
One of the main criticisms leveled at Tether is that its quarterly certifications, published through BDO Italia, lack full audits. In addition, observers argue that the reports may not meet the stringent standards likely to be set by new US legislation
However, despite the complexity of the issue, it appears that in the United States neither of the bills under discussion has made much progress.
Conflicts of interest and FUD on Tether and the leading stablecoin USDT
For now, all of the Coinbase CEO’s concerns seem to be directed towards the spread of the FUD campaign against Tether. While we stress that new stablecoin regulation in the US remains a mirage, we point out how Tether will not have much difficulty adhering to the rules.
At this moment, in fact, according to the report on USDT reserves, the company has 83.89% of its reserves in “Cash, cash equivalents and other short-term depositsThis category includes 80.32% of US government securitiesAs for the remaining part, short-term deposit solutions are easy to liquidate.
source: https://tether.to/en/transparency/?tab=reports
This means that to adapt to potential regulatory change, only the remaining tranche of collateral, currently in the form of precious metals, Bitcoin, collateralized loans, and other investments, will have to be converted.
We’re talking about a small portion of Tether’s assets, so it’s easy to think the company would readily comply if necessary. Furthermore, we should note how the FUD around Tether is not taken into account $6 billion in assetswith a big difference between collateral assets and liabilities.
Therefore, at the moment, the difficulties facing the stablecoin issuer seem to be limited to Europe only, where MiCA imposes onerous deposits in EU banks. In the United States, this problem does not currently exist, and will not arise even if the regulatory scenario evolves.
Not everyone may know that between Coinbase’s Brian Armstrong and the FUD issue on Tether, there is an issue Significant conflict of interest Disappeared. In fact, Coinbase is a minority shareholder in Circle, a company that competes with Tether and issues and operates the USDC stablecoin, from which it boasts significant revenue in its annual financial statements.
The exchange is clearly interested in giving more visibility to USDC, providing a dystopian outlook on the current situation of USDT in the US.
