Tether cranks up lobbying 150% as bills and regulatory action percolate in Washington

Tether more than doubled its US lobbying spending in 2023 after keeping a relatively low profile in Washington.

The stablecoin issuer’s parent company, iFinex, increased the amount it spent on lobbying more than 150% last year, to $1.2 million, according to data from OpenSecrets, a nonprofit organisation that tracks political spending.

The dramatic rise in spending took iFinex from crypto’s 11th-biggest spender on K Street to its third — trailing only crypto exchange Coinbase and the Blockchain Association, an industry group.

“Tether maintains a distinct focus on contributing to the development and understanding of digital asset policies,” a Tether spokesperson told DL News.

“Our efforts are primarily directed toward fostering educational initiatives and engaging in ongoing dialogues with policymakers and regulatory authorities.”

Election looming

The news comes ahead of the November presidential election, where cryptocurrencies are expected to become an issue.

Tether’s token holds a total market value of $104 billion, and in January, it posted a $2.6 billion profit for the fourth quarter of 2023.

More lobbyists

The data also shows that Tether doubled the number of lobbyists on its payroll to six.

They include Carlos Trujillo, a Republican former member of the Florida House of Representatives and an ambassador to the Organisation of American States under President Donald Trump.

OpenSecrets didn’t have data on what issues Tether was focusing on, and the issuer didn’t respond to DL News’ request for comment on the matter.

However, crypto companies across the board — as well as traditional financial institutions like Bank of America and Visa — have all increased their lobbying around stablecoin legislation.

Stablecoin lobbying picks up

The crypto industry has long clamoured for tailored stablecoin regulation. A bipartisan stablecoin draft law hammered out in the House Financial Services Committee passed a committee vote in July.

Ron Hammond, the Blockchain Association’s director of government affairs, told DL News that talks on the bill have restarted, and he expects to see it pass a full House vote before Congress breaks for its August recess.

Washington insiders say another strong contender is a bipartisan bill reportedly being considered by Senators Cynthia Lummis, a Republican from Wyoming, and Kirsten Gillibrand, a Democrat from New York.

In reserve

Stablecoin legislation would likely force issuers to hold at least one dollar in safe reserves for each dollar worth of stablecoin issued, and subject them to regular disclosures and inspections.

Tether’s stablecoin is the world’s biggest, commanding about a 70% share of the market.

In the past, critics have doubted that it has the reserves to back up its coin, noting that its holdings were in unsecured commercial debt.

The company has also never had a full audit, though CEO Paolo Ardoino says he has tried to get one.

Tether’s custodian, Cantor Fitzgerald, said in January that it has adequate reserves and was holding mostly US Treasuries.

Reach out to the authors at joanna@dlnews.com or ana@dlnews.com.