Fox Business reporter Eleanor Terrett revealed that stablecoin issuer Tether has engaged in discussions with U.S. Congress members to provide input on drafting the Stablecoin Transparency and Accountability Act.
Tether Collaborates with U.S. Lawmakers
According to Terrett's tweet on February 15, 2025, Tether (the issuer of USDT, the world's largest stablecoin) met with U.S. representatives to contribute to federal-level stablecoin regulatory frameworks. The discussions focused on collaborating with House Financial Services Committee members Bryan Steil and French Hill regarding their proposed STABLE Act introduced on February 6.
Tether CEO Paolo Ardoino emphasized:
We will not abandon Tether to let it die simply because it doesn’t fit U.S. regulations. However, uncertainties remain, and we aim to voice our concerns during the legislative process.
Compliance with proposed regulations would require Tether to:
- Undergo monthly audits by U.S. accounting firms.
- Maintain 1:1 reserve backing.
- Obtain pre-approval for reserve assets from regulators.
JPMorgan Analysis: Tether’s Reserve Compliance Rates
JPMorgan analysts recently noted that Tether may need to divest non-compliant collateral assets to adhere to potential U.S. stablecoin laws. Two key bills under discussion:
- STABLE Act: 66% of Tether’s reserves currently qualify.
- GENIUS Act: 83% compliance rate.
Ardoino countered by highlighting Tether’s liquidity and profitability:
Even in extreme scenarios, JPMorgan overlooks Tether’s $20B+ equity in liquid assets and quarterly profits exceeding $1.2B from U.S. Treasury holdings.
Federal Reserve’s Perspective on Stablecoins
Fed Governor Christopher Waller stated that dollar-backed stablecoins reinforce the USD’s global dominance by:
- Expanding demand for U.S. debt (stablecoin issuers are among the largest buyers of Treasuries).
- Promoting dollar liquidity in capital markets.
Waller advocated for allowing both banks and non-banks to issue stablecoins under state-level oversight but warned of risks like depegging and ecosystem fragmentation.
FAQ
1. Why is Tether engaging with U.S. lawmakers?
To shape stablecoin regulations, ensuring USDT’s longevity while addressing compliance challenges.
2. What are the key requirements under proposed U.S. stablecoin bills?
Monthly audits, 1:1 reserves, and regulatory pre-approval of collateral assets.
3. How does Tether respond to JPMorgan’s compliance concerns?
By underscoring its $20B+ liquidity buffer and profitability from Treasury investments.
4. What broader role do stablecoins play in dollar dominance?
They amplify global USD demand through Treasury purchases and financial market integration.
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