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

Article Author: Yueqi Yang

Reprint: Lawrence, Mars Finance

Tether, the largest stablecoin issuer in the world 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's CEO Paolo Ardoino stated that once the anticipated stablecoin legislation is passed, the company will "act quickly" to create a new token.

Last Friday, Aldo Iino stated in an interview at 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 said that Tether plans to establish a presence in the United States after legislation is passed this year, 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 be passed around August, or as we anticipate, before August, if this timeline remains unchanged, we will act swiftly," he said.

"We are actively discussing with regulators, explaining to them the importance of the work we are doing outside the United States and what we can build internally in the United States," he said.

The stablecoin legislation that is rapidly advancing in Congress may prohibit Tether from entering the U.S. market due to its lack of registration in the United States. Tether's market circulation is $144 billion, over $80 billion higher than the second-largest stablecoin operated by Circle.

Unlike other volatile cryptocurrencies, stablecoins are pegged to the US dollar and backed by government bonds and other safe 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 cooperates 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 manage these assets until he takes office as the U.S. Secretary of Commerce.

Aldoino stated that the new stablecoin can 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 publicly listed video platform Rumble.

As Congress rapidly passes legislation, the competition surrounding stablecoin regulation 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 his goal is to sign stablecoin legislation before August.

Tether is still exploring ways for USDT to remain listed on US platforms after legislation is passed. Aldoino stated that he is negotiating with lawmakers to explain how Tether operates and hopes that USDT can retain its presence in the secondary market in the US, meaning it will continue to be listed on US cryptocurrency exchanges but will focus on international markets.

In order to improve the liquidity of its new stablecoin, he expects that market makers holding these two stablecoins will be able to facilitate a one-to-one conversion between the US stablecoin and USDT.

Aldoino stated that Tether has no plans for an IPO and does not need to raise funds for the new entity planned to be established in the United States. Meanwhile, Circle has applied for an initial public offering.

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

His main contact at Cantor right now is Howard Lutnick's son, Brandon Lutnick. "Great guy, very smart. I'm very grateful he's in charge of Cantor," he said.