Tether, the leading provider of stablecoins, has announced a new policy that aims to improve the security and reliability of its tokens. The policy, which was announced on December 9, 2023, will freeze wallets that are associated with sanctioned persons or entities on the OFAC SDN List.
Tether’s Wallet-Freezing Policy
The OFAC SDN List is a list of individuals and entities that are subject to U.S. sanctions and whose assets are blocked by the U.S. government. The new policy will enable it to freeze wallets that are added to the list, as well as wallets that were previously added but not frozen.
The policy is a voluntary and proactive measure that will help it work more closely with global regulators and law enforcement agencies. The policy is also a continuation of its previous decision to introduce sanctions controls for wallets on its platform.
Tether’s CEO, Paolo Antonio, said that the policy is a strategic decision that reflects their commitment to maintaining the highest safety standards for the stablecoin ecosystem. He said that the policy would prevent the potential misuse of the tokens and promote a safer and more positive use of stablecoin technology.
Tether’s Role In the Stablecoin Ecosystem
Stablecoins are pegged to a fiat currency or a basket of assets, such as the U.S. dollar or gold. They are designed to provide stability and liquidity in the volatile and fragmented cryptocurrency market.
Tether is the most popular and widely used stablecoin, with a market capitalization of over $90 billion as of December 10, 2023. Tether’s tokens, which are backed by reserves of U.S. dollars and other assets, are used for various purposes, such as trading, remittance, payment, and hedging.
The new policy has received mixed reactions from the cryptocurrency community. Some have praised Tether for being proactive and responsible, while others have criticized this stablecoin for being opaque and untrustworthy.
Martin Folb, a cryptocurrency influencer who goes by the alias MartyParty, said he supports this initiative and believes it will benefit the stablecoin ecosystem. He said that the policy would bring in the U.S. Stablecoin Act, a proposed legislation that would regulate stablecoins and protect consumers.
Folb said that the Stablecoin Act would create a level playing field for stablecoins and foster global adoption. He said that Tether is leading the way for stablecoins and setting an example for other providers.
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