Tether’s Fate in the U.S.: Legislative Pressure vs. Network Dominance

This piece by Veronica Irwin on Laura Shin’s Unchained Crypto, outlines how new stablecoin bills introduced in Congress could present a regulatory challenge for Tether. The Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act in the Senate and the Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) Act in the House would require issuers to maintain one-to-one reserves and secure a U.S.-based audit to continue operating in the United States. So, OP's observation is that Tether has never conducted a full audit, only quarterly attestations through BDO; according to her, this could pose an existential threat to USDT issuance in the U.S.

Howard Lutnick’s Role and Tether’s Potential Path to Compliance

While the legislation may appear to put Tether in a dangerous position, I believe there is reason to believe that the presence of Howard Lutnick, CEO of Cantor Fitzgerald and President Trump’s nominee for Secretary of Commerce, will significantly influence the outcome. Lutnick is a long-time business partner and investor in Tether; so let’s just assume serious alignment of interests between Tether and the U.S. administration. This connection will enable Tether to navigate regulatory scrutiny, secure an audit, or find alternative mechanisms to remain compliant without fundamentally altering its operations. If political influence plays a role, Tether could either receive a carve-out or an extended grace period, which would diminish the immediate impact of these bills.

Even in the Worst Case, Tether Remains Strong

Even if the regulatory framework forces Tether out of the U.S. market, the impact may be overstated. I saw this tweet the other day from Paolo Ardoino, where he addressed “concerns” about competition and regulatory challenges at the PlanB Forum El Salvador, reinforcing the incredible scale of Tether’s network. His statement emphasizes that Tether has spent a decade building an unparalleled global digital and physical distribution system, with:

• Hundreds of thousands of partners

• Physical kiosks across developing nations

• Digital platforms with tens of millions of users

• A role in strengthening the U.S. economy through extensive U.S. Treasury holdings

He makes it clear that while competitors rely on capital incentives to banks, Tether has ever so deeply embedded itself into financial infrastructures worldwide, particularly in emerging markets (one of the reasons why I love Tether). This network effect is incredibly difficult to replicate, which is why USDT has remained the dominant stablecoin despite numerous regulatory, paid FUD campaigns and so-called competitive challenges.

Tether’s Unshakable Network Effect

If we consider the trajectory of stablecoins at the current rate, regulatory pressure from the U.S. won’t be the death knell for Tether that some anticipate. Instead, it may reinforce its position as a decentralized alternative to U.S.-controlled digital assets. Emerging markets have already integrated USDT into their financial ecosystems, and these economies are where Tether’s true power lies. Even if major U.S. exchanges like Coinbase or Kraken were to delist USDT, it would still thrive internationally. However, I agree that not purchasing T-bills would have a somewhat serious effect. (would have to explore in a different article)

Tether’s deep integration into global commerce and remittance networks means that its utility extends far beyond the scope of U.S. regulation. As Paolo put it;

"There are still billions of people left out from basic financial services, good people that are simply too poor to be of interest to banks. We’ll continue in our mission to help them too."

With his increase of regulatory pressure in the U.S. I’m sure there will be an increase of friction, but an existential threat is far removed. Howard Lutnick’s presence in the administration will soften the blow, and in the meantime, Tether will just keep on building and deploying new cool products. USDT, in essence, has no borders. It’s embedded everywhere. Tether is undeniable.