Coinbase CEO Brian Armstrong announced the leading US cryptocurrency exchange may remove Tether's USDT stablecoin from its platform if mandated by upcoming US regulations. The statement came during Armstrong's recent interview in Davos.
The potential delisting would mirror Coinbase's recent action in Europe, where USDT was removed due to non-compliance with the EU's Markets in Crypto Assets (MiCA) regulation.
Armstrong anticipates new US stablecoin legislation could require issuers to hold reserves exclusively in US Treasury bonds and undergo regular audits. While Tether currently keeps about 80% of its $138 billion reserves in Treasury bills, it also maintains holdings in other assets like Bitcoin and gold.
"There are a lot of people with [USDT], 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 explained.
The move could reshape the stablecoin landscape, where USDT remains the dominant player ahead of competitors like Circle's USDC. Notably, Coinbase holds a major stake in Circle, which has been gaining market share in regions where Tether faces regulatory challenges.
While two Senate bills proposing such restrictions on stablecoin issuers have been introduced, neither has advanced yet. The outcome remains uncertain, especially as Tether recently announced plans to relocate its headquarters to El Salvador.
Despite operating primarily in emerging markets outside the US and Europe, Tether's access to the US market through major exchanges like Coinbase remains valuable for its operations. The company currently provides quarterly financial attestations through BDO Italia, though critics argue these fall short of full audits.
Armstrong's statement signals Coinbase's readiness to align with incoming regulatory frameworks, even if compliance requires removing the market's largest stablecoin from its platform.