Tether’s dominance over the stablecoin market—holding more than 75% market share—could be at risk as new U.S. legislation seeks to enforce stricter regulations on stablecoin issuers.
On February 6, 2025, House Financial Services Committee Chairman French Hill and Digital Assets Subcommittee Chairman Bryan Steil introduced the Stablecoin Act, a bill that establishes a regulatory framework for U.S. payment stablecoins.
The bill follows the GENIUS Act, introduced a week earlier by Senator Bill Hagerty, which also demands stronger stablecoin oversight and requires fully backed reserves in U.S. dollars, Treasury bills, and Federal Reserve notes.
Tether has long faced criticism over its lack of transparency, with audits conducted by BDO Italia rather than any Big Four accounting firms. Unlike USDC, which is fully compliant with existing regulations, Tether has never undergone an independent third-party audit.
As U.S. lawmakers push for greater regulatory clarity, Circle’s USDC—which already adheres to strict compliance standards—could gain market share at Tether’s expense.
With Tether recently exiting the European Union due to MiCA regulations, the Stablecoin Act may present its biggest regulatory challenge yet.
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