Coinbase CEO Brian Armstrong prognosticates that imminent US stablecoin regulations could mandate issuers to back their dollar-pegged tokens entirely with US Treasury bills. Such a requirement may complicate operations for offshore entities aiming to serve the US market. In a discourse with The Wall Street Journal at the World Economic Forum in Davos, Armstrong conveyed an anticipation of clearer guidelines surrounding stablecoin legislation.
He highlighted the potential necessity for US-based stablecoin entities to fully collateralize their tokens with US Treasury securities and undergo regular audits.
Armstrong specifically mentioned Tether as a likely target of this forthcoming legislation.
He emphasized that if Tether fails to comply with these prospective US regulations, Coinbase would consider delisting USDT. Nevertheless, Coinbase plans to continue offering USDT services, aiding customers in accessing additional crypto assets during this transitional phase. Armstrong noted, "Numerous individuals hold Tether; we aim to provide them an exit strategy while guiding them towards what we perceive as a more secure system."
Cointelegraph previously reported that Coinbase had delisted USDT and some noncompliant stablecoins in Europe ahead of the Markets in Crypto-Assets Regulation (MiCA). However, a Coinbase spokesperson mentioned to Cointelegraph that if these stablecoins achieve compliance with MiCA at a later stage, relistings might occur.
The current valuation of the stablecoin market stands at $218.7 billion, with the top five stablecoins comprising 92% of this value, according to CoinMarketCap.
US stablecoin legislation has emerged as a principal concern. Former President Donald Trump has intimated that cryptocurrencies, notably stablecoins, will feature prominently in his potential second term. In line with this, Republican Representative Tom Emmer declared that Congress' foremost crypto agenda is to "enact comprehensive market structure and stablecoin legislation." Emmer, now serving as Vice Chairman of the House Subcommittee on Digital Assets, Financial Technology, and Artificial Intelligence, remarked that pro-crypto legislation is poised for advancement under a Republican-majority Congress, further citing the reduced influence of former SEC Chair Gary Gensler.
The objective of stablecoin legislation is to "fortify" the US dollar's standing as a global reserve currency, as per the Payment Stablecoin Act championed by US Senators Cynthia Lummis and Kirsten Gillibrand. This act, introduced on April 17, 2024, is currently under review by the Committee on Banking, Housing, and Urban Affairs.