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Representatives from Circle and Coinbase are requesting U.S. legislators to empower the Treasury Department to clamp down on USDT issuer Tether.<\/p>\n
The stablecoin wars have reached Washington, D.C.<\/p>\n
Representatives from Circle<\/a> and Coinbase<\/a> testified today in front of Congress, requesting that the legislative body grant additional powers to the U.S. Treasury to crack down against Tether<\/a> and its U.S.-based banking partner, Cantor Fitzgerald.<\/p>\n \u201cI personally believe no company should be allowed to reference the US Dollar without having democratic values inside their USD-backed stablecoin,\u201d said Caroline Hill, Director for Global Policy and Regulatory Strategy at Circle, the company that issues the USDC stablecoin.<\/p>\n Hill\u2019s words echoed those of Grant Rabenn, Director of Financial Crimes Legal for Coinbase, who claimed<\/a> today that \u201ccriminals seek those off-shore platforms\u201d that don\u2019t offer the robustness of compliance that companies like Circle do. Tether dominates the stablecoin sector with its USDT stablecoin.<\/p>\n <\/p>\n Rabenn and Hill vehemently insisted Congress take action and offer the U.S. Treasury more powers to investigate and clamp down on their number one competitor \u2013 accusing Tether of enabling money laundering and terrorist financing.<\/p>\n Stablecoins are digital currencies pegged 1:1 with a fiat currency, in most cases, the U.S. Dollar. Hong Kong-based USDT is the market favorite by a wide margin, commanding $51 billion in 24-hour volume, followed from afar by USDC with $7.1 billion.<\/p>\n Today\u2019s hearing comes amid a widening gap in market capitalization between Tether\u2019s USDT and Circle\u2019s USDC, considered a sign of interest from investors and traders. After bottoming out in mid-November 2023, USDC has bounced from $25 billion to $28 billion.<\/p>\n Meanwhile, USDT has been unstoppable since December 2022, with its market cap surging from $65 billion to $97 billion, according to Coingecko<\/a>.<\/p>\n Stablecoins are a core component of the crypto industry, with many pundits calling them the killer use case<\/a> for blockchain-based assets. An uptick in volume is normally considered a sign of renewed interest in the entire asset class.<\/p>\n On-shore stablecoins, such as USDC, have taken a clear pro-regulatory<\/a> stance, seeking compliance with U.S. regulators. However, that has not translated into more interest from investors around the world, who continue to transact with USDT \u2013 known for adopting a more laissez-faire approach.<\/p>\n \u201cThose off-shore companies often play jurisdictional whack-a-mole attempting to avoid tough AML rules and expecting that regulators don\u2019t care,\u201d said Rabenn today, insisting that \u201cthe U.S. government should use all existing tools to go after these platforms.\u201d<\/p>\n The comments from Hill and Rabenn are slightly confounding, given the industry\u2019s goal of fighting claims from Congress that crypto is mostly used for illicit activities.<\/p>\n As Circle and Coinbase cried foul to regulators, industry players lambasted these actions \u2013 with some calling out the hypocrisy.<\/p>\n \u201cTreasury department should investigate Circle for all of the times they did not blacklist illicit funds when they had ample time instead of larping as the compliant centralized stablecoin,\u201d wrote<\/a> renowned on-chain sleuth ZachXBT.<\/p>\n His words reverberated across the platform, with many calling it \u201cdisgraceful\u201d and \u201ctrash behavior.\u201d<\/p>\nOffshore versus on-shore<\/h2>\n
Crypto Twitter responds<\/h2>\n