Tether's Stablecoin Dominance May Wane Following Proposed U.S. Rules: S&P
Regulatory clarity in the U.S. may attract traditional banks to enter the stablecoin market and reduce Tether's dominance. Senators Lummis and Gillibrand introduced a stablecoin bill to define operations. The bill could limit non-bank institutions to a $10 billion issuance, offering banks a competitive advantage. Tether's USDT has a $110 billion market cap, while Circle's USDC is at $34 billion. S&P predicts that the bill's approval could accelerate institutional blockchain innovation and reduce Tether's dominance. USDT, issued by a non-U.S. entity, may not be permitted under the bill, potentially reducing its demand and boosting U.S.-issued stablecoins. The removal of the SEC's requirement for custodians to report digital assets on their balance sheet could lead to new providers of digital asset custody services and greater competition.
