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Tether Regulation Will Become Apocalypse for Cryptocurrencies

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Tether Regulation Will Become Apocalypse for Cryptocurrencies

Tether Regulation Will Become Apocalypse for Cryptocurrencies
CONTENT

  • New US bill poses problems for Tether

  • The American government needs control over stablecoins

  • Tether could be replaced with a regulated crypto dollar

International consortium of news organizations developing transparency standards.

US regulators are increasing pressure on unregulated stablecoins like Tether. The crypto community fears the consequences

Tether Regulation Will Become Apocalypse for Cryptocurrencies

The cryptocurrency community is alarmed by a new US bill called the Stable Act. If it is adopted, multi-billion dollar transactions will end, and the industry will roll back in development for several years..

Under this law, issuers of stablecoins such as Tether must have banking licenses..

That’s not all. The bill introduces additional reporting requirements to the Federal Reserve System (FRS). It also offers emission reconciliation in addition to current audit requirements and an insurance policy to cover assets.

According to another proposal, stablecoin issuers may have to store reserves directly with the Fed. As a result, they will be under the control of the central bank, which will seriously limit their open use..

Cryptocurrency Apocalypse

Dragonfly Research has carefully analyzed the current use of stablecoins. In her report, she concluded that the passage of the bill could spell the end of Tether:

Tether Regulation Will Become Apocalypse for Cryptocurrencies

“There is no doubt that the day Tether is destroyed will be the apocalypse.”.

Tether is the largest and most used stablecoin today. According to the Tether Transparency Report, this year alone supply volume grew by 410%, and its market capitalization increased from $ 4.1 billion in early January to $ 20.9 billion..

Over the past couple of years, Tether, or “crypto dollar”, has revolutionized the industry. He opened access to huge flows of liquidity that were not possible with the use of fiat currencies..

The USDT has become a lifeline for many people in countries with hyperinflation or tight exchange controls. He also contributed to the growth of DeFi and Ethereum.

However, some US agencies and prosecutors are investigating Tether. Until now, the company has taken only minor measures in terms of protection or audit.

The study also says that Tether cannot continue to sustain such colossal growth, which is unsustainable. According to the authors, the entire industry will collapse on the day of his death..

“The crypto markets will be taken over, the exchanges will be chaotic, millions of crypto traders are likely to lose access to assets, and prices will collapse.”.

The future of stablecoins

For now, the Stability Law is just a proposal. For example, it generates a lot of criticism from industry leaders and entrepreneurs. They argue that this project will push the US back into the dark ages in terms of innovation and digitalization..

Tether Regulation Will Become Apocalypse for Cryptocurrencies

However, a recent statement from the Presidential Working Group does not bode well for this segment. The statement says that all stablecoin holders must screen customers carefully, which means that stablecoins are in the line of fire..

Perhaps Tether is not the future digital dollar. Firstly, regulated stablecoins – stablecoins – literally translated from English “stable” coins – continue to gain popularity in the digital asset market. With … More, which becomes the de facto standard, is only a possible replacement. And secondly, control and inspections by governments, banks and tax authorities will be strengthened. If this is true, then the freedom that we have today thanks to the movement of digital money may be a thing of the past..

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