Coinbase CEO Brian Armstrong Says the Exchange Would Delist Tether's USDT Stablecoin if Compelled by New Legislation

A few current attempts to rework US crypto legislation would impact the firm, but they have not advanced yet.

Coinbase would comply with any new legislation that requires the exchange to delist Tether’s USDT stablecoin, according to CEO Brian Armstrong.

Several ongoing attempts to revamp US crypto legislation would affect the company, but none have advanced.

So far, Tether has faced minor hurdles from the EU’s MiCA legislation, but a similar effort in the US could drastically impact its operations.

US Legislative Changes Could Impact Tether

Coinbase CEO Brian Armstrong has been outspoken about the previous administration’s crypto crackdown. The exchange faced several challenges from the SEC under Gensler’s leadership.

While a US Court sided with his company in the SEC legal battle, the CFTC later issued a subpoena against it. Additionally, Armstrong accused the FDIC of withholding key documents from his exchange.

However, the exchange has welcomed the positive regulatory changes under the new administration. Armstrong now claims that Coinbase would indeed delist Tether’s USDT if compelled.

“There are a lot of people with [USDT], and we want to give them an off-ramp, if we want to help them transition to a system that we think is more secure,” said Armstrong.

Armstrong further added that US lawmakers may force Tether and other stablecoin issuers to fully back their reserves in US Treasury bonds and pass regular audits. Tether currently holds a majority of its reserves in Treasury bonds, but it also maintains reserves in commodities such as Bitcoin or gold.

This particular issue also caused significant challenges for USDT in the EU under the new MiCA regulation.

In other words, Armstrong predicts that a similar issue may occur with Tether in the future. In such an event, he would comply with any delisting requirement, just as EU exchanges did.

Moreover, Coinbase is a major shareholder in Circle, a smaller stablecoin that directly challenged Tether’s European market dominance.

“The stablecoin scene’s now worth $218.7 billion, and this move could change the game, especially with the US pushing to keep its dollar on top. This could be the beginning of some major shakeups for Tether and its competitors,” Mario Nawfal later posted on X (formerly Twitter).

In other words, while the US is heading towards a new pro-crypto regulatory paradigm, enforcement actions are still possible, especially for non-US crypto entities.

Armstrong noted that the Senate introduced two bills that would impose these restrictions on Tether, but neither of them have advanced yet. Even though Tether recently moved its headquarters to El Salvador, the company still needs the US market.

Ultimately, it’s anyone’s guess as to how likely these regulations are to pass. The US crypto space is crying out for a comprehensive new regulatory framework, which would almost certainly impact Tether.

Armstrong wanted to signal that Coinbase is ready to cooperate with this framework, even if it ends up sidelining Tether.