- Tether issued one billion USDT on the Ethereum network and transferred $225 million to Bitfinex just before a key Fed meeting.
- Bitcoin rallies had been made before when the USDT was minted, and traders would see similar price activity.
- The GENIUS Act was recently passed in the U.S. Senate to regulate stablecoins and is currently going to the House.
Tether minted 1 billion USDT on Ethereum just 30 minutes ago, according to blockchain tracker Lookonchain. Less than a month after minting, $225 million of it was sent to an exchange called Bitfinex, which was related to Tether. Markets have taken notice of the timing since later today, a Federal Open Market Committee (FOMC) meeting is anticipated.
Analysts have also highlighted that when Tether minted large USDT batches, there was a sharp rise in Bitcoin on two occasions. Historical trends indicate that rallies in Bitcoin can be fueled by increases in stablecoin supply, especially when exchanges hold stablecoins. Such stablecoins are generally considered dry powder to purchase risk assets when volatility arises, especially during macroeconomic events.
Regulatory Milestone for Stablecoins Clears the Senate
With Tether ramping up the supply, lawmakers are working on long-awaited stablecoin bills. On June 17, the U.S. Senate voted in a bipartisan 68 to 30 majority to pass the GENIUS Act. The bill is currently filed in the Republican dominated House of Representatives.
The Guiding and Establishing National Innovation for U.S. Stablecoins Act, or the GENIUS Act, proposes a new legal framework to issue and examine stablecoins. Public companies with a market cap of over 50 billion would have their audits yearly. The act also sanctions foreign producers such as Tether and limits technology enterprises from issuing stablecoins without satisfying the rigid risk and privacy criteria.
Advocates also think that the bill may unlock tremendous demand in U.S. Treasuries, since it standardizes the deployment of stablecoins into international markets. David Sacks, a venture capitalist, said clarity would unleash, in effect, trillions of dollars of demand. According to him, the stablecoins provide a more economic and efficient payment rail, further strengthening the U.S. dollar in digital economies.
Crypto Legislation Gains White House Support
The advancement of the GENIUS Act is in the wake of another failed cloture vote in May. Previously, possible conflicts of interest with former President Donald Trump’s investment in digital assets derailed progress. Trump’s family holds shares in World Liberty Financial, the firm behind the USD1 stablecoin launched in March.
Nevertheless, the White House has already expressed its full support for the GENIUS Act and its sister bill, the CLARITY Act. Lawmakers are seeking the final pass before the July congressional recess.
Senator Bill Hagerty, who sponsored the amendment, stated that the act has made the U.S. a leader in the regulation of cryptocurrency in the global system. He noted that stablecoins will go a long way by making consumers and businesses benefit through instant settlement.
