Tether has expressed support for a provision of the U.S. Crypto Market Structure bill, including the section that prohibits stablecoin yield, drawing criticism from members of the crypto community and prominent figures like Coinbase CEO Brian Armstrong, Brogan Law reported Thursday, citing sources familiar with the matter.
Tether’s US arm reportedly met with members of the Senate following Armstrong’s public criticism of the latest version of the bill.
The head of Coinbase withdrew his support for the legislation regarding several key elements, including the restriction preventing exchanges from providing interest on stablecoins. He accused the banking lobby of trying to eliminate competition for deposits.
Tether told senators during the meeting that it did not support Armstrong’s decision to make the dispute public, according to the report.
Coinbase, which pays some users 3.5% on Circle’s USDC, has been the strongest advocate for allowing a stable return on the currency. The exchange receives all interest income from USDC held on its platform and 50% of Circle’s income from USDC held elsewhere.
The division over the bill between key industry figures emerged after Tether launched its USAT stablecoin this week. The initiative is led by Bo Hines, who briefly served as executive director of the White House Crypto Council.
The company described USAT as a U.S.-regulated, dollar-backed token designed for the federal stablecoin framework introduced by the GENIUS Act, complementing its flagship stablecoin USDT, the dominant player in the global market.
Two sources told Brogan Law that Tether is seeking banking partnerships for the USAT stablecoin.
