By Angus Berwick
Coinbase Global would remove stablecoin tether from its U.S. cryptocurrency trading platform if required by new legislation, CEO Brian Armstrong said in an interview at the Journal House in Davos, Switzerland.
Tether, which is pegged 1:1 to the dollar, is the world's most traded cryptocurrency, but authorities are scrutinizing its use by a plethora of crime groups, sanctions evaders and terrorist organizations to move money around the globe unhindered.
If tether's issuer, also called Tether, couldn't comply with any new U.S. laws, Coinbase would delist it, Armstrong said. He said Coinbase would like to continue to offer tether to give customers a way to shift their holdings into other cryptocurrencies.
"There are a lot of people with tether, and we want to give them an off-ramp, if we want to help them transition to a system that we think is more secure," Armstrong told Charles Forelle, The Wall Street Journal's deputy editor-in-chief, at the World Economic Forum.
Coinbase delisted tether for its European customers last month in response to new EU regulations for digital currencies that force stablecoin issuers to hold a portion of their reserves in cash at banks. Tether has said it opposes this new requirement because it could create more risk.
Tether's smaller rival, U.S.-based Circle, in which Coinbase is a shareholder, says its own USDC stablecoin is already compliant with the EU's Markets in Crypto-Assets Regulation.
U.S. senators have introduced two bills to regulate stablecoins in the U.S. that would ban the use of offshore, unregulated versions such as tether, though neither has yet advanced.
Armstrong said he expected future U.S. legislation to demand stablecoin issuers hold 100% of their reserves in U.S. Treasury bonds and to periodically pass audits. Tether keeps most of its reserves in Treasurys, but also backs its currency with holdings of gold, bitcoin and loans. Tether, whose holding company is registered in the British Virgin Islands, has never released fully audited financials.
The Justice and Treasury Departments have been investigating Tether for possible violations of sanctions and anti-money-laundering rules, the Journal reported last year. Tether has said it cooperates with law enforcement to combat illicit activity.
For more on Armstrong's comments, watch here:
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(END) Dow Jones Newswires
January 21, 2025 13:40 ET (18:40 GMT)
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