Article author: Yueqi Yang
Article translation: Block unicorn
Tether, by far the world’s largest stablecoin issuer, said it plans to create a new stablecoin for the U.S. market if Congress passes cryptocurrency legislation this year.
In an interview with The Information, Tether CEO Paolo Ardoino said the company would “move quickly” to create a new token once expected stablecoin legislation is passed.
The new stablecoin “is something that will meet the needs of banks, institutions and payment processors,” Ardoino said Friday in an interview from the Midtown Manhattan offices of Cantor Fitzgerald, which manages Tether’s reserve assets such as U.S. Treasuries.
He said Tether plans to set up a U.S.-based entity, likely named Tether USA, after U.S. legislation is passed this year. Tether recently moved its headquarters to El Salvador. He expects the new entity to be regulated at the federal level under the legislation. “Given that legislation is expected to be passed around August, or before August as we anticipate, if that timeline holds, we will move quickly,” he said.
“We are in active discussions with regulators to explain to them the importance of what we do outside the U.S. and what we can build inside the U.S.,” he said.
Stablecoin legislation that is rapidly advancing in Congress could ban Tether from entering the U.S. market because it is not registered in the U.S. Tether has a market capitalization of $144 billion, more than $80 billion more than the next largest stablecoin, operated by Circle.
Unlike other volatile cryptocurrencies, stablecoins are pegged to the U.S. dollar and backed by Treasury bonds and other safe assets to protect their value. Stablecoins are a convenient way to transfer money across borders and trade cryptocurrencies. Tether has been criticized for using its stablecoin, called tether or USDT, by drug dealers and terrorist groups. Tether says it works with law enforcement to freeze assets used by criminals.
Tether hired Cantor Fitzgerald to manage the assets backing its stablecoin. The firm, which was run by Howard Lutnick until he became U.S. Secretary of Commerce, continues to manage those assets.
Ardoino said the new stablecoin could be used for payments, the digital economy and interbank settlements. Tether has been investing in its own distribution network — a portfolio of companies that could drive adoption of its stablecoin, such as Tether’s $775 million investment in publicly traded video platform Rumble.
The race to influence stablecoin legislation is heating up as Congress moves quickly to pass laws. On Wednesday, the House Financial Services Committee approved a stablecoin bill, sending it to the full House. Last month, the Senate Banking Committee passed a similar bill, and President Donald Trump said he aims to sign stablecoin legislation by August.
Tether is also exploring ways for USDT to continue to be listed on U.S. platforms after legislation is passed. Ardoino said he is negotiating with lawmakers to explain how Tether works and hopes that USDT can remain in the U.S. secondary market, that is, it will continue to be listed by U.S. cryptocurrency exchanges, but will focus on the international market.
To boost liquidity for its new stablecoin, he expects market makers who own both stablecoins will be able to facilitate one-to-one conversions of the U.S. stablecoin and USDT.
Ardoino said Tether has no plans to go public and does not need to raise capital for a new entity it plans to set up in the U.S. Circle has filed for an initial public offering.
Ardoino said he could not meet with Lutnick because of a potential conflict of interest but called him a "personal friend" and a "great man."
His main contact at Cantor right now is Brandon Lutnick, son of Howard Lutnick. "Great guy, very smart. Very grateful to have him at the helm of Cantor," he said.
