The US Attorney General Warns About These Coins: Risk for the Country's Economy! - Coin Bulletin

New York Attorney General Letitia James warned foreign stablecoin issuers in a letter sent to the US Congress, stating that assets like Tether (USDT) pose a risk to the US economy.

As discussions about new legislation for cryptocurrency regulations are taking place in the US, New York Attorney General Letitia James sent a critical warning letter to congressional leaders. Attorney General James stated that stablecoins should be backed one-to-one by US dollars or Treasury bonds. She emphasized that companies issuing these stablecoins should be US-based and subject to American laws.

The Attorney General specifically targeted the world’s largest stablecoin provider Tether (USDT). Despite a large portion of Tether’s reserves being backed by US Treasury bonds, the company was identified as a risk factor for operating outside the US. James also pointed out that Tether holds various assets in its reserves, such as Bitcoin (BTC) and precious metals.

Letitia James stated that the amount of $94.5 billion in U.S. Treasury bonds held by Tether corresponds to approximately 55% of the daily bond market volume. The Attorney General noted that in the event of a potential collapse in the cryptocurrency market, investors would want to quickly convert their stablecoins into dollars, which could lead to a crisis similar to a bank run scenario.

On the other hand, emphasizing that Tether recently moved its headquarters to El Salvador, James reminded that the company has previously been accused of misrepresenting its reserves.

Recently, Tether is taking various steps to establish better relationships with US regulators. CEO Paolo Ardoino announced that the company is preparing to launch a new stablecoin based in the US, while Tether is also planning to enhance reserve audits by collaborating with major accounting firms.

James emphasized in his letter that digital assets like Bitcoin (BTC) threaten the global dominance of the US dollar and requested that stablecoins be regulated by law, stating that “A strong dollar is critical to the national interests of the US.”