US-Born Tether Achieves Global Success – Just Not in the US
- Paolo Ardoino (Tether CEO) argues the US is behind in establishing clear crypto regulations but expects an improvement after the elections.
- Ardoino stressed the importance of US regulatory actions, as global regulators look to the US for guidance.
- US Representative French Hill hopes that several bills related to stablecoins and crypto could move forward during the post-election lame-duck session of Congress.
How do you build a crypto product in a specific market, with a product from that market, but without clear rules in that market?
You build it for a different market, of course.
In a recent speech at DC Fintech Week, Tether's CEO Paolo Ardoino discussed how $USDT found new global use cases while dealing with an uncertain US regulatory environment.
Made in the USA for the WorldStablecoins are crypto products tied to fiat currencies, pegged' at a 1:1 ratio.
The idea behind Tether, the world's leading stablecoin by market capitalization, is very simple.
Let's bring together blockchain, that amazing technology created by Bitcoin, and the most used currency in the world, the US dollar. Paolo Ardoino
But marketing that product ran into some issues.
Theearly use of stablecoins focused on cryptocurrency trading settlement, swapping more volatile cryptos such as $BTC and $ETH for stable' alternatives like USDT.
But that market was necessarily limited. Once Tether began to look beyond one use case, more options opened up.
Three billion people don't have access to a bank account, the majority beyond the borders of the US and Europe.
Reaching those people proved to be the key to Tether's expansion, with use cases growing dramatically:
- Savings accounts for unbanked individuals
- Cross-border payments
- Commodities trading settlements
- US Treasury holdings
Perhaps unsurprisingly, $USDT's market cap and market share have both grown.
But Tether ran into a hurdle.
$USDT found increased utility around the world but remains limited by the United States' regulatory stance on cryptocurrencies.
All while $USDT's market cap grew from $67B to $120B in two years, an 80% increase.
Tether: US Compliance Despite Regulatory UncertaintyThe regulatory environment has been a major concern for industry leaders like Tether's CEO, who believes the US has dropped the ball' on crypto regulation.
Without clear rules, Tether (and other parts of the crypto world) worked hard to increase transparency.
In the past, Tether has faced scrutiny from US regulators, including a $41M fine for misleading statements about its reserves. Moving forward, Tether wants to be more serious about compliance.
The result is a tension between an uncertain US environment and a world increasingly eager to adopt crypto.
New Regulatory Environment Under a Crypto President'There's hope for improvement; two Republican-led pieces of legislation promise to clarify the US approach to crypto.
| Legislation Name | Details |
| Splits crypto regulation duties between the SEC and CFTC, with a decentralization test' determining whether a token is a security or a commodity. Allows crypto tokens to decentralize over time to become a commodity. | |
| Establishes that stablecoins are not securities. Sets a framework for who can issue stablecoins. |
The US Congress has stalled both bills for some time in a lame-duck session ahead of the November 5 elections.
Representative French Hill indicated that in a lame duck, with legislators unwilling to commit, there's more room for negotiating and seeingwhat's in the realm of possibility.'
Tether's Paolo Ardoino anticipates the upcoming election will bring significant progress toward enacting crypto regulations.
With both presidential candidates - Kamala Harris and Donald Trump - promising to prioritize crypto in an unprecedented way, there's potential for a sea change in the US regulatory outlook.
Outlook: Will a Slow Start Pick Up Speed?The crypto industry has invested heavily in lobbying efforts, hoping toinfluence these legislative outcomes positively.
The US still sets the tone, as Ardoino noted.
It's important for the US to maintain its leadership because every other regulator in the world is looking to the US for guidance on crypto regulations.Paolo Ardoino
With both political parties paying serious attention to crypto for the first time, the US has a real chance to regain the lead.
References- What is the FIT21 Crypto Bill? (Techopedia)
- HR 4766 (US Congress)
- Crypto Bills May Move Forward in Lame Duck Congress (Cointelegraph)
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