Coinbase Hints at Delisting Tether's USDT Stablecoin If New US Rules Require Stringent Adherence

One of the biggest cryptocurrency exchanges in the US, Coinbase, has hinted that it may take Tether's USDT stablecoin off its platform if new rules

One of the largest cryptocurrency exchanges in the United States, Coinbase, may have to remove Tether’s USDT stablecoin from its platform if new rules in the country demand stricter adherence.

Coinbase CEO Brian Armstrong recently touched upon the potential implications of new stablecoin regulations in the US under President Donald Trump. According to Armstrong, upcoming legislation could require stablecoin issuers to hold 100% of their reserves in Treasury bonds and conduct regular audits for transparency, as reported by the Wall Street Journal.

Armstrong suggested that Coinbase may have to delist the $138 billion stablecoin if such regulatory measures become mandatory. Notably, Coinbase had already delisted USDT from its European platform due to noncompliance with the EU’s MiCA framework.

Tether remains the leading stablecoin in the market, surpassing competitors such as Circle’s USDC and Ripple’s newly introduced Ripple USD (RLUSD). Despite its dominance, Tether has faced scrutiny over its reserve practices and financial disclosures.

Tether's Reserves and Criticism

Tether claims to hold 80% of its reserves in U.S. Treasury bills, which are verified through financial attestations by BDO Italia, an independent accounting firm. These quarterly updates were introduced following the 2022 market crash that highlighted insolvencies at major firms such as FTX and Three Arrows Capital.

While these attestations provide some reassurance, critics argue that they fall short of complete audits, raising concerns over Tether’s financial stability. It remains to be seen whether Tether will comply with any upcoming U.S. regulations that may impose stricter reporting requirements.

Emerging markets outside the United States and Europe are a key focus for Tether. Notably, the company will be setting up its world headquarters in El Salvador, which became the first country to adopt Bitcoin as legal tender. This strategic move underscores Tether’s pursuit of markets with favorable cryptocurrency regulations.

Coinbase's stance highlights the increasing pressure on stablecoin issuers to adapt to the evolving regulatory landscape. As governments roll out stricter regulations, the stablecoin ecosystem is poised for significant shifts.