Coinbase CEO recently stated that his exchange would delist Tether’s USDT if authorities demand it or if Tether fails to comply with new US laws.
New Stablecoin Regulations on Horizon
Coinbase Global CEO Brian Armstrong has said his cryptocurrency exchange would have no choice but to delist the stablecoin issued by Tether, known as USDT, should authorities demand it. Armstrong, who has lobbied the U.S. to create a cryptocurrency framework, added that Coinbase would take similar action if Tether fails to comply with any new U.S. laws.
However, according to a Wall Street Journal (WSJ) report, the CEO acknowledges that many of Coinbase’s users hold the stablecoin, and the company’s desire is to preserve this status quo. Armstrong’s remarks about the possibility of Coinbase completely delisting USDT from its platforms come a month after the crypto exchange delisted the stablecoin on its platform used by Eurozone residents.
As reported by Bitcoin.com News, months before the delisting, Coinbase, which is a shareholder in another stablecoin issuer Circle, framed the move as part of its efforts to adhere to new rules requiring issuers to obtain an e-money license from a European Union member state. The new rules also obligate stablecoin issuers to hold a portion of their reserves in cash at banks, something Tether reportedly opposes.
“There are a lot of people with tether, and we want to give them an off-ramp, if we want to help them transition to a system that we think is more secure,” Armstrong said.
With the U.S. set to shift its stance under Donald Trump, some believe that two stablecoin bills seeking to require stablecoin issuers to hold U.S. Treasury bonds will be passed. If enacted, such a law would compel Tether and other stablecoin issuers to liquidate non-U.S. Treasury assets.
Late last year, Tether, which posted a net profit of $2.5 billion in the third quarter of 2024, claimed to hold over $105 billion in cash and cash equivalents, with a notable $102.5 billion in direct and indirect exposure to U.S. Treasuries. Furthermore, the stablecoin issuer disclosed that it held assets, including precious metals and secured loans, with a face value of just over $20 billion.
While the enactment of laws proposed by U.S. lawmakers would require Tether to convert these assets to U.S. Treasury bonds, the WSJ report acknowledged that neither bill has made significant progress.
Source: Bitcoin
