A stablecoin regulation bill supported by the industry, the 'GENIUS Act', has passed in the Senate. Last Friday (5/23), Tether's CEO Paolo Ardoino, during an interview with Bloomberg TV, discussed the bill's impact on Tether and the company's future plans.
Table of Contents
ToggleTether Closely Monitors GENIUS Act Compliance
Ardoino stated: "For us, it's crucial to understand how the GENIUS Act distinguishes between foreign and domestic issuers. We are examining the GENIUS Act in a way that allows us to comply with regulations while still focusing on foreign markets."
Ardoino emphasized that Tether's primary market remains the 3 billion people in developing countries without bank accounts or banking systems. However, they are seeking a way to issue stablecoins domestically to serve the important US market.
The House and Senate stablecoin bills require stablecoins to be fully backed by "safe assets" like cash and short-term government bonds, and mandate that issuers comply with the Bank Secrecy Act and anti-money laundering regulations.
"Stablecoins are certainly important in the US, but in fact, in the US, you can make payments through multiple methods like PayPal, financial cards, credit cards, and cash," Ardoino said.
Although Tether currently does not serve US customers, most of its reserve assets comply with the proposed US legislation. The company also uses Bitcoin and secured loans as backing assets, which would not be allowed. Due to its scale, Tether would be subject to federal-level regulation if it chooses to apply for a US license under such rules.
Ardoino Criticizes MiCA Act, Says Europe Lags Behind US
In the interview, Ardoino also mentioned the European MiCA Act. Since the MiCA Act requires stablecoin issuers to place most assets in bank deposits, which he considers unfavorable, he referenced the previous Silicon Valley Bank run. The GENIUS Act, however, allows stablecoin issuers to place assets in more diverse products like US short-term Treasury bills and money market funds, which is what Tether is currently doing.
Tether has been collaborating with the FBI and US Department of Justice for years and strictly implements KYC and AML measures. Ardoino believes Tether will have no problem operating in the US!
Tether Actively Promotes Comprehensive Transparent Audit
In March, Tether appointed a new CFO, Simon McWilliams, who has over 20 years of investment management and financial audit experience, to drive Tether's ongoing commitment to transparency and regulatory readiness. This appointment is an important step in strengthening Tether's financial management and transparency.
Tether currently conducts quarterly certifications with BDO, one of the world's top five independent accounting firms, and its asset reserves are managed by Cantor Fitzgerald & Co., previously led by Howard Lutnick, Trump's Commerce Secretary.
The more favorable US regulatory environment is also pushing Tether towards reserve audits by the Big Four accounting firms. Ardoino stated that Tether is still in discussions with these companies and emphasized that "comprehensive audit is our top priority."
Banks Considering Joint Stablecoin Issuance, Is Tether Worried?
As stablecoins are crucial to the crypto market's operation, the current stablecoin circulation has reached $248.9 billion. Last Friday, the Wall Street Journal reported that a major bank consortium, including JPMorgan, Bank of America, Citigroup, and Wells Fargo, is exploring the possibility of jointly issuing stablecoins.
Ardoino stated:
We are not worried about competition from big banks because they will focus on the Western world. Our customer base is the 3 billion people without bank accounts who do not use the banking system.
Risk Warning
Crypto investments carry high risk, with potentially significant price volatility. You may lose your entire principal. Please carefully assess the risks.
The stablecoin bill, the GENIUS Act, just passed in the US Senate, is expected to be legislated before 5/26. In this regard, White House AI crypto czar David Sacks stated in an interview on 5/21 that if the legislation passes, it could potentially bring "trillions of dollars" in US debt demand overnight. However, some Democratic members still have concerns about Trump potentially profiting from the bill. Additionally, the Republican Party's covert inclusion of a "credit card penalty restriction" clause has sparked backlash from banking professionals, potentially affecting the bill's passage timing.
ToggleGENIUS Vote Passed, Sacks: "Confident in Completing Legislation"
The GENIUS Act was passed by US Senators with a vote of 66:32 on May 20th Taiwan time, with 15 Democratic Party members crossing over to support the Republicans.
In response, White House AI crypto czar David Sacks said in an interview: "We are now very confident that we can complete the legislation."
(US Stablecoin Bill GENIUS Act Voted Through! Legislation to be Completed Before 5/26, Democratic Warren Remains Silent)
Global $200 Billion Stablecoins in Circulation, Legislation Could Create "Trillions in US Debt" Demand
Sacks also emphasized that over $200 billion in stablecoins are currently in global circulation, but due to the lack of a clear legal framework, they remain in a gray area. He stated:
"Once the rules are established through legislation, it could potentially create trillions of dollars in US debt demand overnight."
Sacks Sells Coins to Avoid Suspicion, Trump Family Still Actively Entering Crypto
According to White House documents, while Sacks sold approximately $200 million in crypto assets before entering the White House, the Trump family continues to advance into the crypto space:
- The crypto project World Liberty Financial, supported by the Trump family, issued a stablecoin USD1, claiming it is backed by US Treasury bonds and cash
- Abu Dhabi's MGX fund announced an investment of $2 billion in USD1 to Binance, creating the largest single investment in the crypto space
Trump Family's Profit-Seeking Controversy Unresolved, Democratic Party Members Strongly Oppose
Many Democratic Party members still have concerns about the GENIUS Act, arguing that:
"The President and his family directly participating in cryptocurrency issuance is equivalent to legislating for their own benefit."
This was one of the main reasons Democratic Party members previously blocked the GENIUS Act. Although it has passed procedurally, moral and regulatory controversies remain.
Bill Content Hides Landmines, Credit Card Fine Limit Clause Upsets Banking Industry
Republican Senator Josh Hawley secretly added a "credit card fine limit" clause to GENIUS, which is seen as a "poison pill" for the banking industry and could potentially lead to opposition to the bill and affect its passage.
NYU Professor Austin Campbell also tweeted that the US banking industry feels anxious about the rise of stablecoins, as it threatens their profit model.
(Comprehensive Overview of US GENIUS Act: Stablecoin Issuance Thresholds, Reserve Standards, and Regulatory System)
Risk Warning
Crypto investments carry high risks, and prices may fluctuate dramatically. You may lose all of your principal. Please carefully assess the risks.
