Introduction
Tether, the world’s largest issuer of stablecoins, has announced plans to launch a new US dollar-backed stablecoin by the end of 2025 or early 2026. This development reflects a strategic pivot towards closer alignment with U.S. regulatory frameworks, especially in light of recent scrutiny over its reserves and operations.
Audit Reveals Reserve Changes and Regulatory Strategy Shift
An audit for the first quarter of 2025 shows that Tether’s excess reserves have decreased from $7 billion to $5.6 billion. The company’s reserves are managed by Cantor Fitzgerald, which raises concerns over potential conflicts of interest.
Tether’s CEO, Paolo Ardoino, revealed this initiative during an interview at the Token2049 conference in Dubai. He confirmed that the company is awaiting the outcome of ongoing U.S. legislation before finalizing the launch timeline. This new token aims to comply with U.S. regulations, distinguishing itself from the existing USDT token that dominates the global cryptocurrency trading landscape.
Lobbying Efforts Intensify in Washington
This national pivot comes as Ardoino ramps up Tether’s presence in Washington, D.C., engaging in private meetings with legislators and hosting a luncheon with Republican Senator Bill Hagerty. Tether is actively advocating for legislation like the GENIUS Act, which could benefit foreign issuers like itself if they agree to cooperate with U.S. law enforcement.
Ardoino emphasized Tether’s collaborative relationship with U.S. agencies, claiming that no other financial entity matches its level of cooperation. Despite past criticism regarding its role in facilitating illicit transactions, the company is focusing on transparency and legal compliance to gain regulatory approval. Although Tether’s headquarters remain in El Salvador, its efforts to develop a compliant U.S. stablecoin reflect a significant evolution in its regulatory strategy.
Scrutiny Over Cantor Fitzgerald Association
As part of its reserve management strategy, Tether holds billions in U.S. Treasury bonds managed by Cantor Fitzgerald, a prominent Wall Street firm. The company’s recent attestation report confirmed nearly $120 billion in such bonds, despite a drop in its excess reserves.
The link to Cantor Fitzgerald has come under scrutiny due to its management being associated with the U.S. Secretary of Commerce, Howard Lutnick. Addressing concerns about conflicts of interest, Ardoino stated that appropriate “walls” are in place and clarified that he does not have direct communication with the Secretary. He further noted that Tether has $7 billion in excess capital, suggesting that traditional institutions could benefit from emulating its model.
Following a $18.5 million settlement with the New York Attorney General in 2021 over misleading statements about its reserves, Tether has begun issuing regular attestation reports. Ardoino maintains that the company is now better capitalized than many traditional financial entities and is prepared to withstand significant market shocks.
Domestic Stablecoin Market Heats Up
Tether’s planned expansion into the U.S. stablecoin market comes amid heightened political scrutiny. World Liberty Financial, backed by the Trump family, has recently announced plans to launch its own dollar-pegged token, intensifying competition for regulatory legitimacy and market share.
As stablecoins remain a hot topic in Washington, legislative proposals like the GENIUS Act may pave the way for clearer compliance routes for issuers. Tether’s ability to influence policy could prove crucial as it seeks to navigate an increasingly monitored environment leading up to the 2026 elections.
Tether’s decision to issue a regulatory-compliant stablecoin represents not merely a technical step but also a political statement. As discussions regarding regulation gain momentum, the company’s future may hinge less on its market dominance and more on its legal alignment with U.S. financial policies.
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