Tether CEO Paolo Ardoino told Bloomberg on Friday that the company is “open to” creating a separate domestic stablecoin to meet the needs of the U.S. market. This comes as the U.S. is trying to pass the Guiding and Establishing National Innovation for U.S. Stablecoins Act (Genius Act).
Ardoino said that Tether, the issuer of the world’s largest stablecoin USDT, is “getting comfortable” with the Genius Act and will comply with it. However, he added that USDT’s main market will continue to be emerging economies, as these are the markets that “need us the most”. He believes in the importance of USDT as the most used digital dollar in emerging markets.
The World Bank estimates that around 1.4 billion adults remain unbanked, mostly in emerging economies in sub – Saharan Africa and parts of Asia. Tether’s main mission is to meet the needs of these individuals who have no access to traditional financial systems. Stablecoin users in emerging markets mainly use USDT for foreign remittances and to preserve the value of their savings during local currency depreciations. Ardoino said that 37% of USDT’s user base uses the stablecoin for savings, and Tether has over 420 million users in developing countries.
In the U.S., the situation is different. With a wide range of payment methods available, USDT is better suited to meet the needs of the unbanked population, rather than being used for payments to improve the efficiency of money, explained Ardoino. Therefore, Tether plans to launch a domestically – issued stablecoin that will be “competitive” in the U.S. economy and have a “different feature set” from USDT.
Ardoino also said that Tether is “very interested” in seeing how the U.S. government regulates stablecoins. The Genius Act requires stablecoin issuers to hold 100% of their reserves in cash equivalents, preferably U.S. treasuries, which Ardoino thinks is a “great idea”. He claims that the Genius Act is better than Europe’s MiCA regulation, which requires U.S. dollar – based stablecoins to hold 60% of their reserves as cash deposits in European banks, a “bad idea” according to him.
Tether wants to see the Genius Act passed because it’s important for the domestic stablecoin of Tether in the U.S. to have regulatory clarity before moving forward. On May 19, the U.S. Senate voted to invoke cloture on the motion to proceed to the Genius Act, and on May 21, the Senate voted on a motion to proceed, moving the Genius Act closer to a final vote. The final floor vote is expected to take place after Congress’s Memorial Day recess.
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