Coinbase says it would delist Tether if necessary

Coinbase has indicated its willingness to delist Tether (USDT) from its platform, depending on how U.S. regulations unfold under President Donald Trump’s administration. In a statement to the Wall Street Journal, Coinbase CEO Brian Armstrong mentioned that the exchange could remove Tether if new laws mandate it, particularly if regulations require more stringent compliance measures for stablecoins. Armstrong predicted that future stablecoin regulations might dictate that reserves be held entirely in U.S. Treasury bonds and necessitate regular audits to ensure consumer protection.

Coinbase had already taken steps to delist Tether from its European platform, citing non-compliance with the European Union’s MiCA (Markets in Crypto-Assets) framework, a regulatory effort aimed at creating a comprehensive set of rules for crypto assets within the EU.

Tether, with a market capitalization of around $138 billion, is the largest and most widely used stablecoin, surpassing competitors like Circle’s USD Coin (USDC) and Ripple’s XRP-backed stablecoins. Tether has been known to hold 80% of its reserves in U.S. Treasury bills (T-Bills) and publishes financial attestations from BDO Italia, an independent third-party accounting firm. These attestations have become a regular feature following the 2022 market crisis, where users and industry players demanded proof of reserves after several major firms, including FTX and Three Arrows Capital, were found to be insolvent.

Despite the transparency efforts from Tether, critics argue that these attestations fall short of full audits. As the regulatory landscape shifts in the U.S., it remains uncertain whether Tether will be able to meet any more rigorous financial reporting requirements that could be introduced by future legislation.

Tether’s operations are heavily concentrated in emerging markets outside the U.S. and Europe. Furthermore, the company has plans to move its global headquarters to El Salvador, the first country to adopt Bitcoin as legal tender. This move could reflect Tether’s efforts to align itself with jurisdictions that are more favorable toward crypto adoption and less restrictive in terms of regulation.