Tether commits to working with politicians to improve stablecoin transparency
Tether, the creator of the world’s most popular stablecoin USDT, has responded via multiple tweets, stating that it will work with policymakers following the United States Senate Banking Committee’s earlier this week letter to several stablecoin issuers — including Tether — inquiring about their operational features.
Tether said in the tweets that it respects politicians’ curiosity in how stablecoins work inside the bitcoin ecosystem. “Collaboration is vital as we grow this industry. As pioneers of blockchain technology and industry leaders in transparency and innovation, Tether is committed to “ensuring our clients are adequately protected and equipped to flourish,” the company said.
According to Ron Hammond, the Blockchain Association’s director of government affairs, the stablecoin issuers include Coinbase, Gemini, Circle, Paxos, TrustToken, Centre, Binance US, and Tether. “This is very certainly a precursor to an impending hearing,” he tweeted.
The committee said in the letters that stablecoins present investor protection issues and raise many concerns about market integrity, as highlighted in a recent study by the President’s Working Group on Financial Markets.
The committee sought particular details from stablecoin issuers, including basic purchases, the minting process, and limits, as well as statistics on issuance and redemption. Additionally, the committee requested that they “summarise any internal assessments or studies [the] firm has performed about the effect of certain amounts of redemptions on [the stablecoin], particularly its convertibility to US dollars, or on [the] company’s financial status.”
The stablecoin firms must reply to these requests by December 3. Just last month, the US Commodity Futures Trading Commission (CFTC) penalised Tether US$41 million for making “false or misleading” representations about the USDT stablecoin’s complete backing by comparable fiat currencies. Tether subsequently said that the CFTC’s decision “found no concerns with Tether’s present operations” and that “these issues were remedied completely when the terms of service were amended in February 2019.”