Return of Tether in the American Financial Sphere
Tether Plans US Expansion Amidst Regulatory Challenges and Ongoing Questions
In a move that could shake up the American cryptocurrency market, Tether, the issuer of the world's most widely-used stablecoin, has announced plans to launch operations in the United States for the first time. This announcement was made by Tether CEO Paolo Ardoino on Wednesday.
Tether's USDT token, with $162 billion outstanding, is the largest stablecoin globally and the most-traded crypto asset by volume. The company aims to challenge Circle's dominance in American markets with its USDT token, as Circle's USDC token currently controls the domestic stablecoin sector.
The Genius Act, signed by President Trump on July 18, opened doors for mainstream financial institutions to use and issue stablecoins for payments and settlements. This new legislation could provide Tether with an opportunity to establish a foothold in the US market.
However, Tether's US ambitions may be affected by its regulatory history and lack of transparency. In 2021, Tether paid $60 million to settle federal and New York state charges over claims it misrepresented its dollar reserves. The settlement banned Tether from operating in New York. Long-standing questions about Tether's transparency persist, as it has never completed a full audit despite years of promises.
Ardoino acknowledged recent discussions with auditing firms but provided no timeline for completing reviews. Tether's troubled regulatory history could pose challenges as it seeks to enter the US market.
While Tether plans to remain a private company, unlike Circle which went public to fuel growth, it is developing plans to serve US institutional clients, specifically banks and trading firms. This focus on institutional clients could help Tether navigate the complex regulatory landscape in the US.
Ardoino expressed no interest in making Tether a public company. Instead, he emphasised Tether's focus on expanding in developing markets, where it sees competitive advantages over rivals.
Interestingly, Ardoino attended Trump's White House signing ceremony last week, along with other crypto executives, further signalling Tether's commitment to engaging with regulatory bodies in the US.
The new stablecoin regulations approved by President Trump last week established federal oversight for stablecoins. This could provide a more stable environment for Tether's operations in the US, should it be able to address its regulatory and transparency issues.
As Tether moves forward with its plans to enter the US market, it will be interesting to see how it navigates the complex regulatory landscape and addresses concerns about transparency. The company's success in the US could have significant implications for the cryptocurrency industry as a whole.
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