This international cooperation could lead to more standardised and comprehensive regulatory frameworks for stablecoins like Tether. “Australian regulatory authorities plan to include stablecoin regulations in the Digital Assets Bill, which is expected to be published by the end of 2024,” Drozdz says. This move towards regulation indicates a growing recognition of the importance of stablecoins in the financial ecosystem.
By bringing USDT to Bitcoin, Tether will introduce its 350 million global users to the most liquid, cheap, and instant global monetary network—Bitcoin. Similarly, it provides its stablecoin users in emerging markets with access to Bitcoin, given the interoperability permitted by the Lightning Network. In the short term, this might happen temporarily if something significant happens in the crypto market which makes investors quickly move a considerable amount of funds to USDT as a safe haven.
For example, USDC can help bridge the trade finance gap in Asia, providing easier access to dollars over the internet, and its low transaction fees make it a practical option. “These factors could reduce the risk of a recession in the United States, which in turn could delay or slow down the Fed’s cycle of interest rate cuts. However, Tether’s future isn’t solely dependent on the strength of the US dollar. Regulatory developments, both in Australia and globally, will also significantly shape its value. As we look to the remainder of 2024, the performance of the US dollar, and therefore USDT, against the INR will largely be driven by the recent economic developments in the United States. At the same time, USDT is a digital currency backed by an equivalent amount of American Dollars held in reserve by Tether Limited.
“Millions of people will now be able to use the most open, secure blockchain to send dollars globally,” said Elizabeth Stark, CEO of Lightning Labs, development organization behind the Lightning Network. “Bringing USDT to Bitcoin combines the security and decentralization of Bitcoin with the speed and scalability of Lightning,” she added. Any references to trading, exchange, transfer, or wallet services, etc. are references to services provided by third-party service providers.
As with any investment decision, it’s advisable to consult with a financial professional and thoroughly research all options before committing funds to Tether or any other investment. The potential for sudden regulatory changes could force unexpected liquidation of holdings at unfavorable times. Some investors have interpreted the weak labor data as a signal that rates haven’t been cut fast enough.
