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When it comes to dominance in the stablecoin market Circle has long played the tortoise to Tether’s hare.
Now Circle’s go-slow-and-comply approach has left it well poised for growth as the US Senate considers potential landmark stablecoin legislation — and its no holds barred rival seems to be fuming.
As DL News reported, Circle’s compliance with regulation in Europe and the US will make it relatively easy for the stablecoin issuer to adapt to potential new landmark legislation.
Needed clarity
In its quest to instil much needed clarity to the stablecoin market, the GENIUS Act would bring major issuers under federal supervision.
The bill will also require independent audits of their reserves to ensure they are adequately backing up their tokens with cash or cash equivalent assets.
“All companies that issue dollar stablecoins — whether they are startups or based outside the US — should have the opportunity to register in the United States and compete on a level playing field,” Dante Disparte, Circle’s chief strategy officer and head of global policy, told DL News.
Momentum for stablecoins is rising.
Last week, DL News reported that Chris Colson, a payments researcher at the Federal Reserve Bank of Atlanta, is convinced stablecoins can become integrated into the payments infrastructure as an innovative new tool.
But it’s going to take time.
Shunned compliance
This is no problem with Circle.
Backed by Goldman Sachs and led by Jeremy Allaire, the company has been audited by Deloitte since 2022 and, based in New York, it already complies with a slew of state and federal financial regs.
In contrast, Tether shunned compliance with MiCA, the European Union’s new crypto rules, even though this meant exchanges would delist its stablecoin, USDT ($1.00).
Opting to remain offshore, the company is moving its headquarters to El Salvador.
To be sure, Tether’s go-fast approach has enabled the 11-year-old venture to dominate the market; USDT’s market value of $142 billion is more than two-and-half times greater than that of Circle’s stablecoin.
With the US market now in play, the ground may be shifting. In a lengthy post on X last week, Tether CEO Paolo Ardoino lashed out at unnamed rivals.
“I’ll leave it to you to define a competitor trying to use lawfare to kill an opponent, instead of focusing on better products,” he wrote.
“Tether won’t stand still and we won’t let these attacks succeed.”
It’s unclear what specific instances of “lawfare” or “attacks” Ardoino was referring to.
Liam Kelly is a Berlin-based reporter for DL News. Got a tip? Email him at [email protected]. creator solana token
