The CEO of Ripple, Brad Garlinghouse, recently voiced his concerns about what he perceives as the US government’s targeting of Tether. During a podcast episode on May 10, Garlinghouse speculated on the potential consequences of these regulatory actions, predicting unpredictable events in the cryptocurrency market.
According to Garlinghouse, “The US government is going after Tether, that’s clear to me.” He emphasized the importance of Tether, a stablecoin, in the crypto ecosystem. This discussion becomes even more significant when considering Ripple’s plans to launch its own stablecoin in 2024, potentially shifting the balance of power in the digital financial market.
Tether Holdings, the parent company of Tether, has already faced numerous accusations and investigations. In October 2023, US political figures, including Senator Cynthia Lummis and Representative French Hill, urged the Department of Justice to evaluate the company’s involvement in suspicious activities, such as terrorist financing. Tether responded promptly, assuring full cooperation with legal authorities whenever required.
The transparency of Tether’s reserves, which back the USDT stablecoin, has also been a point of controversy. In October 2021, the Commodity Futures Trading Commission fined Tether $41 million for making misleading statements about its reserves. The investigation revealed that Tether only held sufficient collateral for USDT on 27.6% of days over a period of more than three years.
These regulatory tensions and investigations contribute to the ongoing debate surrounding the stability and reliability of stablecoins and their role in the digital financial market. Garlinghouse’s comments about the potential targeting of Tether by the US government add an element of uncertainty to the future of cryptocurrency operations, especially as Ripple plans to introduce its own stablecoin tied to the US dollar.
Ripple hopes that its stablecoin, which is backed by dollar deposits, short-term Treasury bonds, and other cash equivalents, will provide a robust alternative in the market. David Schwartz, Ripple’s chief technology officer, explains that this stablecoin aims to offer stability and reliability.
Garlinghouse’s remarks reflect the growing concern among cryptocurrency leaders regarding the impact of government regulation on the sector’s development and stability. As Ripple prepares to launch its stablecoin, the market closely monitors the interactions between major cryptocurrencies and global regulators.
Disclaimer: The views and opinions expressed by the author, or anyone mentioned in this article, are for informational purposes only and do not constitute financial, investment, or other advice. Investing or trading cryptocurrencies carries a risk of financial loss.
Editor’s Choice: The SEC’s decision in the case against Ripple does not hold significance in other cases. Brad Garlinghouse remains optimistic about Ripple’s victory and emphasizes that the crypto industry will overcome the challenges posed by the SEC.