Tether Expands Its Global Footprint by Targeting Institutional Investors

Tether CEO Paolo Ardoino reaffirmed the company's focus on international markets despite mounting U.S. regulatory pressure.

The cryptocurrency industry is buzzing with anticipation as the dust settles on a year of wild price swings and regulatory scrutiny. Among the key players to watch closely is Tether, the company behind the dominant stablecoin, USDT. As the U.S. Congress prepares to vote on the bill that would create the first set of federal rules for stablecoins, the spotlight is falling on how foreign issuers like Tether will be affected.

Among the bills making their way through Congress, the "Good Enduring DEBT Act of 2024," nicknamed the "Genius Act," proposes an interesting regulatory framework. It suggests that any non-U.S. stablecoin issuer seeking to operate in the U.S. after the bill's passage would need to register with the Securities and Exchange Commission (SEC) within 180 days.

However, the bill includes an interesting provision. If a non-U.S. issuer fails to register within the stipulated timeframe, the SEC would be tasked with developing rules for such issuers, taking into account factors like the size and scope of the issuer's operations and the types of investors it serves.

This poses a question: would Tether, the company best known for its USDT stablecoin pegged to the U.S. dollar and boasting over $110 billion in circulation, be subject to the bill's provisions?

In a recent interview with BlockDeverso, Tether CEO Paolo Ardoino confirmed that the company is closely monitoring the implications of the proposed legislation. He revealed that Tether is in advanced talks with a Big Four accounting firm to perform a full-scale audit, something that regulators and institutional investors have long requested.

This move comes in response to increasing pressure from U.S. regulators, especially after the collapse of FTX and the subsequent scrutiny of the cryptocurrency industry.

While discussing the new legislation and how it might impact Tether, Ardoino said that the company is prepared to adapt. He hinted at the possibility of launching a new Tether stablecoin specifically for institutional investors and ensuring full compliance with U.S. regulations.

"We are evaluating the best course of action to enable institutional investors to participate in a fully compliant Tether stablecoin in the U.S., remaining true to our decentralized nature," Ardoino said.

This move would be a significant shift for Tether, which has traditionally focused on serving the unbanked population in emerging markets with its low-friction onboarding and multi-chain support.

"We built Tether not for Wall Street, but for people who don't have a bank in Mena, Africa, or Latin America, to be included in the global financial system," Ardoino added.

As more traditional financial institutions like JPMorgan are exploring digital currencies and potentially launching their own stablecoins, Ardoino highlighted that these initiatives would likely serve different user profiles.

"They will be focused on regulated businesses and institutions, while we will continue to serve the 3 billion unbanked people in emerging markets who are tired of high fees and limited access to financial services."

Ardoino also pointed out that centralized bank tokens often come with strict KYC requirements, which might reduce accessibility for unbanked users in emerging markets.

"We prefer to leave that aspect to the institutions and focus on what we do best: providing a trustless and frictionless experience for the unbanked majority."

The interview touched upon the implications of the new legislation and how it might affect Tether's operations. Ardoino confirmed that they are in talks with a Big Four auditor to increase trust and attract institutional capital.

"We believe that completing an audit with a Big Four firm will be a pivotal moment in our journey, as it will validate our unique model for managing and reporting reserves, showcasing our commitment to transparency and best practices."