S&P: Proposed U.S. Rules Could Impact Tether’s Stablecoin Dominance

S&P Global Ratings believes that the proposed regulations in the U.S. Changes in the stablecoin landscapewhich could undermine Tether’s USDT advantage.

If approved, the regulatory framework would give banks a competitive advantage by capping stablecoin issuance to non-banking institutions at $10 billion, according to an S&P report released Wednesday. There is a possibility that

The prospect of regulatory clarity is expected to create an incentive for traditional financial institutions to enter the stablecoin market, which could erode Tether’s market share, S&P said.

The stablecoin bill introduced by U.S. senators Cynthia Lummis and Kirsten Gillibrand aims to establish guidelines for stablecoin operations in the country. A stablecoin is a type of cryptocurrency that is tied to a fiat currency such as the US dollar and plays an important role within the cryptocurrency market.

Although the US dollar remains the preferred peg for stablecoins, the lack of specific US regulation for most stablecoin issuers could change with the introduction of the Lumis Gillibrand Payments Stablecoin Act. There is a gender.

Analyst Andrew O’Neill highlighted that the bill’s passage could spur institutional blockchain innovation, particularly in areas such as tokenization and digital bond issuance with on-chain payments. This could create opportunities for banks as stablecoin issuers and reduce Tether’s dominance in the global stablecoin market.

S&P said Tether’s USDT, which has a market capitalization of $110 billion, faces potential challenges under the proposed bill because it is issued by a non-U.S. entity and does not qualify as a permitted payments stablecoin. He emphasized that he is facing As a result, U.S. companies may face restrictions on holding and trading USDT, which could reduce demand for USDT.

Additionally, the removal of the SEC’s requirement for custodians to report digital assets on their balance sheets may encourage the emergence of new digital asset custody providers and increase competition in the market.

Despite Tether’s large presence in the market, S&P has previously criticized USDT for perceived shortcomings in fulfilling its primary function of maintaining stable value.

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