The US Senate is evaluating new legislation on stablecoins, promising strict regulations for companies like Tether, issuer of USDT tokens.
New Stablecoin Legislation
According to the proposed legislation, companies wishing to distribute stablecoins to American consumers must adhere to established financial regulatory frameworks. These firms must also register with US agencies and maintain significant reserves in US financial institutions to ensure liquidity.
Potential Implications for Tether
Industry experts believe that Tether will face challenges in meeting new US regulatory demands without significant operational changes. Therefore, the company may consider exploring markets with less stringent regulations, such as El Salvador.
Future of the Stablecoin Market in the US
The proposed legislation also grants the US Treasury Secretary substantial authority to approve international regulations, potentially offering Tether a narrow path back into the US market under specific exemptions. Companies will be required to conduct monthly independent audits of reserves, and executives may face legal consequences for misreporting financial information.
The American stablecoin market is entering a new era of regulation, and the final wording of the legislation could impact consumer financial protections and the operational frameworks for stablecoin providers.
