Stablecoin Issuers Spend Millions on Lobbying Efforts as Regulatory Pressure Mounts
Stablecoin issuers, including Tether and Circle, have spent millions on lobbying efforts in Washington as regulatory pressure mounts, aiming to shape the future of the digital assets and establish regulatory frameworks for the industry.
Introduction:
Leading stablecoin issuers, including Tether, Circle, and Paxos, have collectively spent over a million dollars on lobbying lawmakers in Washington since the start of 2022. With increased focus on stablecoins and the need for regulatory frameworks, these companies are actively engaging in lobbying efforts to shape the future of dollar-pegged digital assets.
Lobbying Efforts of Tether and Circle:
Tether, the issuer of the dominant stablecoin USDT, has employed FTI Government Affairs, a consulting firm with bipartisan connections, to carry out its lobbying efforts through the law offices of Michael Jason Lee. Since the beginning of 2022, Tether has spent approximately $600,000 on lobbying the U.S. Senate and House of Representatives, with a quarterly spend of $120,000. The company is actively supporting legislation related to stablecoins, seeking to influence the regulatory environment. Open Secrets, a government transparency group, reports that Tether allocated an additional $270,000 to lobbying efforts in the first quarter of 2023.
Circle, another major stablecoin issuer, has also invested significantly in lobbying initiatives. Since late 2021, the company has collaborated with strategic consulting firm Invariant and has spent at least $560,000 on lobbying efforts. Circle's lobbying activities involve educating policymakers about its business model, addressing stablecoin and cryptocurrency issues with members of Congress, and monitoring cryptocurrency proposals. The company has engaged with various entities, including the Senate, House of Representatives, Treasury, Office of the Comptroller of the Currency, Commodity Futures Trading Commission, and Securities and Exchange Commission. Circle's quarterly lobbying budget currently stands at $100,000. The firm issues the second-largest stablecoin, USDC, with a market share of 22.6% and a circulation of $29.5 billion.
Paxos and Industry-Wide Trends:
Paxos, the former issuer of the Binance stablecoin BUSD, has allocated around $300,000 for lobbying efforts since early 2022. The company collaborates with bipartisan public policy firm Mindset to address issues related to drafting stablecoin legislation.
Overall, lobbying expenses in the crypto industry in the United States witnessed a significant surge of 120% in 2022. While stablecoin issuers have made substantial lobbying investments, their amounts pale in comparison to other major crypto companies. Coinbase, for instance, has spent approximately $5.5 million on lobbying since 2015, and Binance.US invested nearly $1 million in 2022.
Conclusion:
As stablecoins attract increasing regulatory attention, leading issuers like Tether, Circle, and Paxos are actively lobbying lawmakers in Washington to influence the future regulatory landscape. These companies recognize the importance of shaping stablecoin legislation and educating policymakers about the benefits and risks associated with dollar-pegged digital assets. While stablecoin issuers' lobbying expenses contribute to the broader crypto industry's efforts, they remain comparatively modest. As the crypto sector continues to evolve, lobbying activities play a critical role in shaping policies that foster innovation, ensure investor protection, and establish a regulatory framework conducive to the growth and stability of the digital asset market.
