Tether Engages Lawmakers to Shape Stablecoin Regulations

Highlights:

• Tether is working with US lawmakers to come up with rules that will govern stablecoins.
• The new regulations may require Tether to sell Bitcoin and precious metals to meet stricter reserve asset rules.
• Tether has ventured into sports by acquiring a stake in Juventus football club.

Tether is working with US authorities to come up with regulations to govern stablecoins, according to FOX Business journalist Eleanor Terret. CEO Paolo Ardoino confirmed that they are involved in the process and the company is willing to compromise to remain compliant.

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🚨NEW from me: Offshore stablecoin giant @Tether_to is working with U.S. lawmakers to influence how these fiat-backed currencies are regulated in the U.S.

The issuer of the world’s largest stablecoin $USDT has been a controversial figure in U.S. crypto policy circles due to an…

— Eleanor Terrett (@EleanorTerrett) February 14, 2025

Tether executives have participated in discussions with top legislators regarding three stablecoin bills. Representative Bryan Steil, chairman of the Financial Committee Digital Assets Subcommittee, confirmed the company’s role in these talks.

“We are going to work within the regulatory framework, and we are going to try to advise on every single one of these field proposals to make sure that our voice is heard,” Ardoino stated. The firm’s engagement comes as Congress reviews multiple bills that could impact stablecoin issuers.

The STABLE Act is one of the key bills under discussion. This legislation would require stablecoin issuers to maintain reserves consisting of highly liquid assets. These assets include US Treasury bills and insured bank deposits. Lawmakers want to ensure that stablecoins remain backed by secure financial instruments.

Another bill, introduced by Senator Bill Hagerty, seeks to regulate payment stablecoins while preserving state oversight. This proposal has received bipartisan support and is moving forward in Congress. Meanwhile, Representative Maxine Waters introduced a bill requiring issuers to register and maintain one-to-one reserves backed by US dollars or equivalent assets.

Proposed Law and How It Impacts Tether

If the STABLE Act passes, Tether will have to adjust its reserve holdings. The bill mandates that stablecoin reserves must include only highly liquid, government-backed assets. Tether currently holds a large share of its reserves in short-term Treasury bills. In addition, it holds Bitcoin and other assets.

JPMorgan analysts suggest that Tether may have to sell some of its Bitcoin and precious metals to comply with the new rules. They argue that what they hold in their current reserve might not meet the proposed requirements.

Tether currently undergoes quarterly assessments from the accounting firm BDO. However, under the new regulations, stablecoin issuers may need to submit monthly audits. They would also have to maintain one-to-one reserves with regulator-approved assets.

Ardoino disagreed with JPMorgan’s analysis, stating that their conclusions misinterpreted the company’s operations. He argued that Tether is prepared to adapt and work within the law while it maintains its market position.

While a lot still needs to be defined during consultations on the bills in coming weeks, even in the most extreme scenario, JPMorgan discounts the fact that Tether's group equity (on top of stablecoin reserves) is over $20 billion in other very liquid assets and is generating…

— Paolo Ardoino 🤖🍐 (@paoloardoino) February 13, 2025

In a separate development, Tether has ventured into the sports industry. The company’s investment division recently acquired a minority stake in Juventus, an Italian Serie A soccer club. The financial details of this investment remain undisclosed.

Tether Investments Announces Strategic Minority Stake in Juventus Football Club @juventusfc 🦓

Read more: https://t.co/4qqeT5zLQy

— Tether (@Tether_to) February 14, 2025

JPMorgan Analysis Suggests Tether May Need to Sell Bitcoin

JPMorgan analysts believe Tether may have to adjust its reserves significantly. The proposed regulations would require stablecoin issuers to hold only approved assets. These assets must be liquid and government-backed.

The banking firm reported that Tether might need to sell some of its Bitcoin and precious metals. If the regulations pass, the company would have to shift its reserves toward compliant assets. The firm stated that increased frequent audits could add regulatory pressure. These measures would require stablecoin issuers to disclose reserve details more frequently.

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