XRP lawyer Bill Morgan has directly confronted Senator Cynthia Lummis about a potential loophole in stablecoin legislation.

The loophole could give Tether's USDT an unfair advantage over American-issued stablecoins.

In a surprising turn of events, XRP lawyer Bill Morgan has directly challenged Senator Cynthia Lummis over a potential loophole in stablecoin legislation that could be granting Tether’s USDT an unfair advantage over American-issued stablecoins.

Morgan’s suggestion comes amid criticism of the Senator’s approach to cryptocurrency regulation, which some have accused as being biased in favor of Bitcoin over other digital assets.

The lawyer questioned whether concerns over the controversial provision may be the reason Senator Lummis declined to meet with Ripple CEO Brad Garlinghouse.

Senator Cynthia Lummis (R-WY), a known supporter of cryptocurrencies, canceled a planned meeting with Ripple CEO Brad Garlinghouse on Wednesday despite previously confirming the engagement. The meeting was expected to focus on pro-crypto legislation and the broader crypto market structure during Garlinghouse’s Washington D.C. visit.

However, Garlinghouse revealed on Thursday that the meeting was called off due to “a few members” of Congress having last-minute concerns over a provision in the bipartisan cryptocurrency bill.

This arose after several House members expressed worries about a provision that could permit foreign stablecoin issuers to circumvent U.S. regulations, according to a report by The Block.

The bill, known as the GENIUS Act, is being spearheaded by Senator Lummis and Senator Bill Hagerty (R-TN). It aims to create a regulatory framework for stablecoins, with issuers required to apply for licenses from the U.S. Department of Treasury.

But the bill's draft contains language that could allow offshore stablecoin issuers to sidestep these regulations and continue operating in the U.S. despite non-compliance with American court orders regarding terrorist financing and money laundering.

This provision could place U.S.-based stablecoin issuers, such as Ripple with its RLUSD stablecoin, at a competitive disadvantage as they must comply fully with domestic regulations, while offshore issuers like Tether could retain market access without meeting the same compliance standards.

suggesting that concerns over the stablecoin loophole scuttled the meeting with Garlinghouse.

“Is this why you didn’t want to talk to @bgarlinghouse yesterday. Did you think he may have wanted to discuss the loophole to allow USDT to have an advantage over stablecoins issued by American companies that must comply with US regulations, such as RLUSD issued by Ripple.”

The statement escalates Morgan’s previous criticism of Lummis, who he has counted among the worst Bitcoin maximalists for her legislative approach. The XRP lawyer has accused the Wyoming Senator of championing Bitcoin exceptionalism instead of creating fair regulatory frameworks for all cryptocurrencies.

“Dumpster fire. Unbelievable that anyone could be so focused on Bitcoin that they’d rather scuttle bipartisan legislation to create a U.S. stablecoin and broader crypto framework because it doesn't suit their Bitcoin maximalist agenda. Truly incredible,” Morgan stated.

The document referenced by Morgan suggests that the current draft of the GENIUS Act could create an imbalance. It claims that the bill's provisions are designed to prevent offshore companies like Tether from evading U.S. regulations.

However, recent changes to the bill have weakened these protections and could allow foreign stablecoins to be traded on U.S. decentralized exchanges even if they are issued by companies that refuse to comply with American court orders.

This could create a competitive disadvantage for U.S.-based stablecoin issuers who must comply fully with domestic regulations, such as Ripple with its RLUSD stablecoin.