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Ripple CEO Comments on Tether’s Fate Amid Regulatory Scrutiny

source-logo  coinengineer.io 13 May 2024 10:15, UTC

The most recent podcast episode was where the CEO of Ripple, Brad Garlinghouse, revealed his thoughts about the current level of regulation that Tether, the world’s largest stablecoin issuer, is facing. He made a point about the relevance about the relevance of Tether in the crypto ecosystem and noted that the future was unpredictable.

Regulatory Considerations and Market Implications.

Garlinghouse pointed out the seeming concentration of the US government on Tether, implying that regulatory action against the stablecoin could be quite damaging for the wider crypto markets. He likened the situation to the past “black swan” events in the sector, implying the possibility of unintended outcomes.

“What is clear to me is that the U.S. government is going after Tether,” Garlinghouse concluded, thereby demonstrating the severity of the threat. But he refrained from calling it the next black swan event and rather called it “interesting to watch.”

Ripple’s Stablecoin Plans

In this setting, Ripple is preparing to launch its proprietary stablecoin later this year. The statements from Garlinghouse arrive when Ripple is either entering the stablecoin market or competing with Tether.

Tether’s Legal Battles and Transparency Issues

Tether Holdings Limited, Tether’s parent company, has been embroiled in several legal dilemmas and has received disapproval for its failure to be clear. Recent publications raised issues about its capital adequacy and compliance.

Last year, Tether was fined a big sum by the Commodity Futures Trading Commission (CFTC) for misleading customers about its reserve holdings. Furthermore, the company has been under the scrutiny of the U.S. Department of Justice concerning claims of hiding crypto-related funds.

Ripple’s Response and Stablecoin Strategy

Notwithstanding the regulatory attention given to Tether, Ripple still remains dedicated to its stablecoin aspirations. The plans of Chief Technology Officer David Schwartz to issue a stablecoin are as follows: a U.S. dollar-backed stablecoin, consisting of a mix of dollar deposits, government Treasurys, and other cash equivalents, will be issued.

Uncertain Times Ahead

With the regulatory challenges that the crypto industry is going through, Tether hangs in the balance. The introduction of Ripple into the stablecoin market complicates an already dynamic field. Regulatory scrutiny in the industry seems to be increasing, making all stakeholders closely watch what is going to happen in the coming days.