Regulation is becoming clearer, Tether plans to issue a new stablecoin for the U.S. market

Author: Yueqi Yang

Compiled by: Block unicorn

Tether, the world's largest stablecoin issuer to date, has stated that if cryptocurrency legislation is passed by Congress this year, it plans to create a new stablecoin for the U.S. market.

In an interview with The Information, Tether CEO Paolo Ardoino said that once the anticipated stablecoin legislation is passed, the company will "act swiftly" to create a new token.

Last Friday, Ardoino mentioned during an interview from Cantor Fitzgerald's Midtown Manhattan office, which manages Tether's reserve assets (such as U.S. Treasury bonds), that the new stablecoin "is something that can meet the needs of banks, institutions, and payment processors."

He stated that Tether plans to establish an entity within the U.S. after legislation is passed, possibly named Tether USA. Tether recently moved its headquarters to El Salvador. He expects the new entity to be regulated at the federal level according to the legislation. "Given that the legislation is expected to pass around August, or as we anticipate before August, if this timeline holds, we will act swiftly," he said.

"We are actively discussing with regulators, explaining the importance of what we are doing outside the U.S. and what we can build within the U.S.," he said.

The stablecoin legislation, which is rapidly advancing in Congress, could potentially bar Tether from entering the U.S. market due to its lack of registration in the country. Tether's market circulation is $144 billion, more than $80 billion higher than the second-largest stablecoin operated by Circle.

Unlike other volatile cryptocurrencies, stablecoins are pegged to the U.S. dollar and backed by Treasury bonds and other secure assets to protect their value. Stablecoins are a convenient way to transfer funds across borders and trade cryptocurrencies. Tether has faced criticism for its stablecoin (known as tether or USDT) being used by drug traffickers and terrorist organizations. Tether claims it works with law enforcement to freeze assets used by criminals.

Tether has hired Cantor Fitzgerald to manage the assets backing its stablecoin. The company is managed by Howard Lutnick, who continues to oversee these assets until he takes on the role of U.S. Secretary of Commerce.

Ardoino stated that the new stablecoin could be used for payments, the digital economy, and interbank settlements. Tether has been investing in its distribution network—a portfolio of companies that could drive the adoption of its stablecoin, such as Tether's investment of $775 million in the public video platform Rumble.

As Congress rapidly passes legislation, competition affecting stablecoin legislation is heating up. On Wednesday, the House Financial Services Committee approved the stablecoin bill, sending it to the full House. Last month, the Senate Banking Committee passed a similar bill, and President Donald Trump stated that he aims to sign stablecoin legislation before August.

Tether is also exploring ways for USDT to continue being listed on U.S. platforms after the legislation is passed. Ardoino mentioned that he is negotiating with lawmakers to explain how Tether operates and hopes that USDT can remain listed in the secondary market in the U.S., meaning it will continue to be listed on U.S. cryptocurrency exchanges while focusing on international markets.

To enhance the liquidity of its new stablecoin, he expects market makers holding both stablecoins to help facilitate one-to-one conversions between the U.S. stablecoin and USDT.

Ardoino stated that Tether has no plans for an IPO and does not need to raise funds for the new entity planned in the U.S., while Circle has applied for an IPO.

Ardoino mentioned that due to potential conflicts of interest, he could not meet with Lutnick but referred to him as a "private friend" and a "great person."

His main contact at Cantor is Howard Lutnick's son, Brandon Lutnick. "Great guy, very smart. Very grateful for him running Cantor," he said.