Tether said over Twitter that it would cooperate with authorities to address stablecoin concerns. Tether was recently sent a letter by U.S. Senator Sherrod Brown, which spoke of stablecoins and investor protection.
Tether has announced that it would work with global lawmakers to address any issues associated with stablecoins. The statement was made over Twitter on Nov 25, with the company saying that it would work collaboratively to build this industry.
In the Twitter thread, Tether also linked a press release by Senator Sherrod Brown, who chairs the U.S. Senate Committee on Banking, Housing, and Urban Affairs. Brown sent letters to stablecoin issuers and exchanges asking about how they protected investors. Recipients of the letter include Coinbase, Gemini, Paxos, TrustToken, Binance.US, and Tether.
Tether’s tweets were a response to that press release, and like many other stablecoin issuers, it appears to be working on compliance and is eager to appease regulators. Tether itself has been at the center of a lot of controversy in the market, largely related to the backing of the USDT supply.
Circle, which is behind the USD Coin (USDC) stablecoin, announced earlier this year that it would be working on becoming more transparent to meet accountability standards. The SEC issued a subpoena in early October 2021, and Circle has said that it would fully cooperate with the regulator.
Stablecoins have become a major concern for lawmakers, who fear that they might threaten national currencies and present cross-border economic problems. Several countries are gearing up for stablecoin regulation, or at least an examination of the special asset.
Stablecoin regulation inevitable
The flood of stablecoin related news in recent months is indicative of how keen governments are on curbing the special asset. This is happening at a global level — authorities at G20 called for stablecoin regulation before they are approved for use. They also said that central bank digital currencies (CBDCs) should be implemented before global stablecoin use.
Specific governments are also working on stablecoin regulation, most notably the U.S. government. Late last month, reports emerged that the SEC would be cracking down on the stablecoin market, though few updates have been offered since. SEC Chair Gary Gensler reportedly referred to stablecoins as “poker chips” and sought increased oversight of the niche.
The Consumer Financial Protection Bureau (CFPB) has also launched a big tech probe, which includes stablecoins. Director Rohit Chopra said that if a big tech firm issued stablecoins, it could see widespread public adoption if they leverage their large user bases. Perhaps he was hinting at the Diem stablecoin, which has been a major concern for many regulators.