Regulation is becoming clearer, Tether plans to issue new stablecoins for the US market

Article author: Yueqi Yang

Article translation: Block unicorn

Tether, the world's largest stablecoin issuer to date, said it plans to create a new stablecoin for the U.S. market if Congress passes cryptocurrency legislation this year.

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

Last Friday, Aldoino said in an interview from Cantor Fitzgerald, who manages Tether reserve assets such as U.S. Treasury bonds, that the new stablecoin is "the thing that can meet the needs of banks, institutions and payment processors."

He said Tether plans to establish an entity within the United States after the U.S. passes legislation this year, which may be named Tether USA. Tether recently moved its headquarters to El Salvador. He expects the new entity to be regulated at the federal level under legislation. “Given that legislation is expected to be passed around August, or until August as we expected, we will act quickly if this timeline remains the same,” he said.

“We are actively discussing with regulators to explain to them the importance of what we do outside the United States and what we can build within the United States,” he said.

The stablecoin legislation that is rapidly advancing in Congress may ban Tether from entering the U.S. market because it is not registered in the U.S. Tether's market circulation is US$144 billion, more than US$80 billion higher than the second-ranked stablecoin (operated by Circle).

Unlike other cryptocurrencies with higher volatility, stablecoins are pegged to the US 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 been criticized for using its stablecoins (called tether or USDT). Tether said it worked with law enforcement to freeze assets used by criminals.

Tether hired Cantor Fitzgerald to manage the assets that support its stablecoins. The company was managed by Howard Lutnick until he served as Secretary of Commerce, which continued to manage the assets.

Aldoino said the new stablecoins can be used for payments, digital economy and interbank settlement. Tether has been investing in its own distribution network—a portfolio of companies that could drive adoption of its stablecoins, such as Tether invested $775 million in publicly listed video platform Rumble.

Competition affecting stablecoin legislation is heating up as Congress quickly passes laws. On Wednesday, the House Financial Services Committee approved the stablecoin bill to send it to the House plenary. Last month, the Senate Finance Committee passed a similar bill, with President Donald Trump saying he aims to sign stablecoin legislation by August.

Tether is also exploring ways for USDT to continue to list on US platforms after legislation is passed. Aldoigno said he is negotiating with lawmakers to explain how Tether works and hopes USDT will remain in the secondary market in the U.S., that is, it will continue to be listed on the U.S. cryptocurrency exchange but will focus on international markets.

To improve the liquidity of its new stablecoins, he expects market makers with both stablecoins will be able to help convert US stablecoins and USDT one-to-one.

Aldoino said Tether has no plans to go public and does not need to raise funds for new entities planned to be established in the United States. And Circle has applied for an initial public offering.

Aldoigno said he was unable to meet with Lutnik due to potential conflicts of interest, but called him a "personal friend" and a "great man."

His main contact at present in Canto is Brandon Lutnick, son of Howard Lutnick. "Great guy, very smart. I'm so grateful for him taking charge of Canto," he said.