I think regulation is fair in this case because from the start, USDT has always been tied to the US dollar, which is the most powerful currency globally ( i think)... The law just formalizes things to protect users and ensure that every token is backed 1:1 with real USD. And, the US benefits since the issuer needs to purchase treasury bonds, which indirectly strengthens their economy.
But now, there’s a big difference compared to before. Even though USDT still uses the crypto network for transactions, it’s practically like a bank now. Anyone using it is subject to audits, strict KYC, and anti-money laundering checks, so privacy is basically gone in this area.
Another thing is that issuers can’t offer staking or interest-bearing services anymore because the law is very strict on that. It looks like they only want these issuers to make money from transaction fees and nothing else.
All stablecoin issuers are now staking treasuries and are not prohibited from sharing part of their profits with users But now, there’s a big difference compared to before. Even though USDT still uses the crypto network for transactions, it’s practically like a bank now. Anyone using it is subject to audits, strict KYC, and anti-money laundering checks, so privacy is basically gone in this area.
Another thing is that issuers can’t offer staking or interest-bearing services anymore because the law is very strict on that. It looks like they only want these issuers to make money from transaction fees and nothing else.
If Tether starts requiring KYC for every wallet, they will lose a huge part of their customers.
I also wonder when these stablecoins will be banned en masse in other countries, since they finance the US economy.