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Tether (USDT) Sees Diminishing Volume Amid Federal Stablecoin Hearings

Posted Wednesday, February 23, 2022 by
Timothy St. John • 2 min read

The stablecoin Tether (USDT) is struggling with low trade volume today, down more than 24% over the last 24 hours. Even so, it retains its number three rank among cryptocurrencies and the top spot for stablecoins.


Federal Hearings Affect Tether

US regulators have been holding hearings throughout the month of February, all with the intent of handling the stablecoin problem. The US house committee on financial services held a hearing on February 8th where stablecoins were defined by Treasury representative Jean Nellie as being “investment-like products” and “bank-like products”.

Stablecoins have been under intense speculation for the last few years, with Tether going through a round of investigative hearings to expose where its backing was being held. These hearings resulted in a fine for Tether Holdings Incorporated, but Tether has managed to pull through and retain its prestigious position in the cryptocurrency rankings, despite having to deal with the investigative spotlight.

Another hearing was held by the US Senate on February 15. During this hearing, the Senate Committee on Banking, Housing, and Urban Affairs representative, Sherrod Brown, said that stablecoins need to be investigated deeper by companies due to their real dollar backing. She mentioned that their unique design gives them stability that other cryptocurrency coins do not have.

Stablecoins and the Future

These statements from US government officials appear to support stablecoins, but the level of scrutiny these coins are experiencing has not been healthy for their trade volume.

There’s speculation that US government will launch its own stablecoin in the near future, and the government has been talking about that very scenario for some time now. There’s also the possibility that there will be some sort of crackdown on stablecoins and the wider cryptocurrency market from the US government, which has mostly been hands off about these decentralized finance options for a while now.

Either one of these actions could hurt Tether’s overall rankings and strength, cutting into its trade volume more or making it more difficult for the token to be traded. We’ve already seen crackdowns in other countries dramatically affect the cryptocurrency markets there, specifically in China, where cryptocurrency has been outlawed completely. Those involved in the market there have fled to other countries or given it up entirely.


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