Coinbase to Delist USDT? Brian Armstrong Weighs New Regulatory Landscape
Trump’s latest comments following his inauguration on cryptocurrency regulations have created a euphoric moment for Bitcoin and other assets. Bitcoin emerged from the volatile market with a stunning price of $109,000. However, there is still fear and panic in the market as many believe this new policy change may affect non-U.S. entities.
To avoid controversy, Coinbase CEO Brian Armstrong hinted that the exchange may delist Tether’s USDT stablecoin if new U.S. legislation mandates stricter compliance requirements. The announcement comes as the U.S. crypto industry anticipates regulatory changes that could reshape the stablecoin market.
Regulatory shifts could pose challenges for Tether
in a interview Armstrong and the Wall Street Journal predict that future U.S. regulations may require stablecoin issuers to back their reserves only with U.S. Treasury securities and undergo regular audits. While Tether already holds a significant portion of Treasury reserves, it is also diversified into commodities such as Bitcoin and gold, which could put it at odds with potential legislation.
The CEO highlighted the issues Tether is already facing in the EU under the MiCA framework, which imposes stricter rules on stablecoin issuers. Although Tether recently moved to El Salvador to mitigate regulatory risks, similar regulatory moves in the United States could severely disrupt Tether’s operations.
Coinbase’s position in the stablecoin market
Armstrong stressed that Coinbase is prepared to comply with any new laws, even if it means delisting USDT. He also highlighted Coinbase’s relationship with USDC stablecoin issuer Circle, which has positioned itself as a direct competitor to Tether.
As a major shareholder of Circle, Coinbase can benefit from a regulatory environment favorable to USDC, especially in the U.S. and European markets. Armstrong noted that if Tether is marginalized by the new legislation, the stablecoin market, currently worth $218.7 billion, could see significant changes.
Why worry about non-U.S. entities?
Although the U.S. government is showing signs of a more crypto-friendly regulatory stance, enforcement actions are still possible, especially against non-U.S. entities such as Tether. Armstrong mentioned that two Senate bills aimed at imposing restrictions on stablecoin issuers have been introduced but have not yet gained traction.
Armstrong is certain they will support the changing regulatory environment, even if it means backing measures that could undermine Tether’s dominance. This development signals a potential shakeup in the stablecoin market, with implications for both issuers and users.
On the other hand, if Tether’s dominance declines, Ripple (RLUSD) and Circle (USDC) have a better chance of capturing the market. Notably, Trump held a closed-door meeting with Ripple this month, giving people more reason to believe that RLUSD will find a clear way out to capture the $200 billion stablecoin market in the coming months.
