Tether has expressed support for a provision in the draft US crypto market structure legislation, including the section that bans yield on stablecoins, which has drawn criticism from crypto community members 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 Senate members following Armstrong’s public critique of the latest version of the bill.
Coinbase’s chief withdrew support for the legislation over several key dealbreakers, 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 conflict public, according to the report.
Coinbase, which pays some users 3.5% on Circle’s $USDC, has been the most vocal advocate for permitting stablecoin yield. The exchange earns all interest income from $USDC held on its platform and 50% of Circle’s income from $USDC held elsewhere.
The split over the bill among key industry figures surfaced after Tether’s debut of 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 US-regulated, dollar-backed token designed for the federal stablecoin framework introduced by the GENIUS Act, complementing its flagship stablecoin, USDT, the global market’s dominant player.
Two sources told Brogan Law that Tether is seeking bank partnerships for the USAT stablecoin.