Coinbase May Delist Tether (USDT) Stablecoin If US Regulations Tighten: WSJ

CCoinbase has expressed a willingness to remove Tether's stablecoin from its platform depending on how the U.S. regulatory landscape evolves under President Donald Trump.

Major United States crypto exchange Coinbase might have to remove Tether’s (USDT) stablecoin from its platform if new U.S. laws are introduced, according to CEO Brian Armstrong.

In an interview with the Wall Street Journal, Armstrong said that Coinbase could potentially have to delist the $138 billion stablecoin if new U.S. legislation required it. The CEO anticipates that potential stablecoin regulations would require holding all asset reserves in Treasury bonds and conducting regular audits to ensure customer protection.

Armstrong’s comments come amid increasing scrutiny of stablecoins by U.S. regulators. The Securities and Exchange Commission (SEC) has already taken enforcement actions against several crypto firms for allegedly failing to register their stablecoins with the agency.

Coinbase already delisted Tether from its European platform due to the stablecoin’s noncompliance with the EU’s Markets in Crypto Assets (MiCA) framework.

Tether’s token is the leading crypto stablecoin, followed by competitors such as Circle’s USD Coin (USDC) and Ripple’s RLUSD, which recently entered the market.

According to the company’s latest financial attestation, 80% of Tether’s reserves are held in T-Bills, and the digital payment titan’s attestations are conducted by BDO Italia, an independent third-party accounting firm.

Following the 2022 market crash, Tether began publishing quarterly updates, which became standard practice after the crypto ecosystem discovered the insolvencies of several firms, including FTX and Three Arrows Capital.

While these attestations have addressed some concerns regarding USDT, critics maintain that they do not constitute full audits. It remains to be seen whether Tether would comply with new U.S. legislation if it mandated more stringent financial reporting.

It’s worth noting that Tether’s operations are primarily focused on emerging markets outside the U.S. and Europe. The company also plans to shift its global headquarters to El Salvador, which became the first country to legalize Bitcoin (BTC).