Tether, the world’s largest stablecoin issuer, is actively working with US lawmakers to help shape federal stablecoin regulations, marking a major shift in its approach to compliance and regulatory engagement. The company is reportedly engaging with key Congressional representatives and providing input on multiple stablecoin bills, including the STABLE Act introduced on February 6.
This move signals Tether’s willingness to adapt to US regulations and could have far-reaching implications for the stablecoin market, crypto adoption, and the role of digital dollars in global finance.
Tether Pushes for Regulatory Clarity
According to Fox Business reporter Eleanor Terrett, Tether is in talks with Representatives Bryan Steil and French Hill, the lawmakers behind the STABLE Act, which proposes a comprehensive regulatory framework for stablecoins.
Tether CEO Paolo Ardoino confirmed that the company is also seeking to provide input on two additional stablecoin bills, acknowledging the growing push for regulation in Washington.
“We are not going to just throw in the towel and let Tether die just for the sake of not adapting to US legislation. But there is still a lot of uncertainty over what’s actually going to happen, and we want our voice to be heard in the legislative process,” Ardoino told Terrett.
What Would US Stablecoin Regulation Mean for Tether?
If Tether were to fully comply with US regulations, it would likely need to:
- Conduct monthly reserve audits through a US-based accounting firm.
- Maintain a strict 1:1 asset collateralization for all issued stablecoins.
- Increase transparency in financial disclosures and compliance reports.
Tether’s regulatory push comes as the SEC and other agencies ramp up discussions with industry leaders on creating clear stablecoin policies. Meanwhile, the Trump administration has signaled a strong interest in bringing stablecoin issuers onshore—a move that could further integrate digital assets into the traditional financial system.
Federal Reserve Sees Stablecoins as a Tool for US Dollar Dominance
Tether’s move also aligns with growing Federal Reserve interest in leveraging stablecoins to strengthen the global dominance of the US dollar.
Speaking on February 6, Federal Reserve Governor Christopher Waller said that stablecoins pegged to the US dollar could expand its global reach, making the greenback even more dominant as a reserve currency.
Why Stablecoins Matter to the Fed
- US stablecoins drive demand for US Treasury bonds – Issuers like Tether hold billions in government debt as collateral for their stablecoins, strengthening the dollar’s position in global markets.
- Stablecoins boost international trade in dollars – USDT and other fiat-backed assets enable cross-border transactions with low fees and instant settlements, making them attractive in emerging markets.
- Banks and non-banks could issue their own stablecoins – Waller suggested that both traditional financial institutions and fintech companies should be allowed to issue regulated stablecoins, expanding competition in the market.
Risks and Challenges Ahead
Despite warming up to stablecoins, the Federal Reserve remains cautious about risks such as:
- De-pegging events – Instances like Terra’s UST collapse in 2022 raised concerns about stablecoin stability.
- Fragmentation of the stablecoin market – A lack of standardization across different issuers could complicate regulatory oversight.
Tether’s Future in a Regulated US Market
Tether’s involvement in shaping US stablecoin policy could increase its legitimacy among regulators and institutional investors. However, full compliance may also mean significant changes to the company’s reserve management, reporting, and operational structure.
Key Takeaways
- Tether is engaging with US lawmakers to influence stablecoin regulations.
- The STABLE Act and other bills could require stricter transparency and compliance.
- The Federal Reserve sees stablecoins as a tool to maintain US dollar dominance.
- Regulatory uncertainty remains, but Tether is positioning itself for a compliant future.
As stablecoins become increasingly embedded in global finance, Tether’s evolving regulatory stance will be a key factor in its long-term survival and dominance. Whether this shift boosts investor confidence or leads to greater scrutiny remains to be seen—but one thing is clear: stablecoin regulation in the US is no longer a question of if, but when.
