S&P: Regulatory Clarity Could Encourage Banks to Enter Stablecoin Market, Reduce Tether's Dominance

SP Global Ratings has stated that regulatory clarity in the US could encourage traditional financial institutions to enter the stablecoin market, potentially reducing the dominance of Tether's USDT. The introduction of the Lummis-Gillibrand Payment Stablecoin Act seeks to define how stablecoins will operate in the country and could offer banks a competitive advantage by limiting non-banking institutions to a maximum issuance of $10 billion. The report also suggests that new providers of digital asset custody services could emerge with the removal of the SEC's requirement for custodians to report digital assets on their balance sheet, leading to greater competition.