Tether leverages $150B market cap to enter US markets, facing regulatory scrutiny and challenging Circle’s USDC dominance. Strategic partnerships aim to bypass banking restrictions as policymakers debate stablecoin oversight.
Tether’s CEO Paul Ardoino confirmed in a July 8 CNBC interview that the stablecoin giant is pursuing US market access through blockchain infrastructure partnerships, days after releasing a controversial transparency report omitting US banking ties.
Offshore Giant Targets Domestic Market
Tether Holdings Ltd. is negotiating with three US-based blockchain infrastructure providers to establish dollar redemption channels, according to CEO Paul Ardoino’s CNBC disclosure. This follows their July 10 transparency report showing $157B reserves but reliance on Bahamas-based Britannia Bank for settlements.
Regulatory Hurdles Intensify
The Senate Banking Committee postponed markup of the Clarity for Payment Stablecoins Act until 2025, per Senator Cynthia Lummis’ July 11 statement. Treasury Undersecretary Nellie Liang warned: ‘Non-US domiciled issuers complicate enforcement of anti-money laundering standards’ during a Brookings Institution panel on July 9.
USDC Fortifies Domestic Position
Circle’s USDC increased its US market share to 72% in Q2 2024, bolstered by $12B inflows into BlackRock’s BUIDL Treasury Fund. CEO Jeremy Allaire stated July 9: ‘Our regulated approach ensures seamless integration with traditional finance systems.’
Monetary Policy Implications
Federal Reserve analysts note Tether’s $42B in US Treasury holdings now rival mid-sized US banks. Former FDIC chair Sheila Bair observed: ‘Algorithmic settlement systems could create shadow dollar liquidity beyond the Fed’s balance sheet controls.’
This expansion echoes the 1970s Eurodollar market growth, when offshore dollar deposits surpassed domestic M1 supply. Like London banks then, Tether’s structure enables cross-border settlements without US intermediary oversight. The company processed $16.2T in transactions during Q2 2024 – exceeding Visa’s $14.9T global payment volume.
