XRP Attorneys Ask Lummis about the USDT advantage of the Stablecoin Bill loophole

XRP lawyer Bill Morgan has faced Senator Cynthia Ramis directly on potential loopholes in the Stubcoin Act. The loophole could give Tether’s USDT an unfair advantage over the ridiculous stubcoin issued by the US. Morgan’s challenge comes amid growing criticism of the Senators’ approach to cryptocurrency regulation.

Ramis questioned how he refused to meet Ripple CEO Brad Garlinghouse

Morgan questioned whether concerns over the controversial provisions were the reasons why Sen. Ramis refused to meet Ripple CEO Brad Garlinghouse. XRP’s lawyers suggested that while the senators place submissive American Stablecoin publishers like Ripple’s RLUSD at a disadvantage, they might want to avoid discussing how loopholes can benefit USDT.

The conflict escalated Morgan’s previous criticism of Ramis. He labelled among the worst bitcoin maximalists because of her legislative approach. Morgan accused Wyoming Senators of defending Bitcoin’s exceptionalism rather than creating a fair regulatory framework for all cryptocurrencies.

Genius behaviour creates regulatory disparities

According to documents referenced by Morgan, the current draft of the Genius Act includes a language that will allow offshore Stablecoin publishers to bypass US regulations. The bill is said to allow businesses to issue offshore silly things, whilst avoiding compliance requirements imposed on domestic operators.

The text suggests that the law aims to prevent offshore companies like Tether from circumventing US regulations, but recent changes have weakened these protections. The draft reportedly allows foreign silly idiots to be traded in US decentralized exchanges, even when issued by companies that refuse to comply with US court orders regarding terrorist financing and money laundering.

Ripple’s RLUSD faces a disadvantage amid regulatory uncertainty

This provision could create competitive drawbacks for US-based Stablecoin publishers like RIPPLE. On the other hand, offshore issuers like Tether may maintain market access without meeting the same compliance standards.

Morgan’s suggestion that a stubcoin loophole influenced Ramis’ decision to cancel a meeting with Gerlinghouse adds a new dimension to the controversy. The CEO of Ripple had planned to discuss crypto laws and market structure during his visit to Washington.

Gerlinghouse publicly challenged Ramis to reconsider her position, noting that she should lead efforts to support not only Bitcoin but all cryptocurrencies, as chairman of the crypto-friendly Wyoming Digital Assets Subcommittee and Senator.

The cancelled meeting attracted criticism from industry observers who viewed it as evidence of a focus on Bitcoin rather than developing a broader crypto ecosystem. Critics argue that the current structure of genius law could undermine the US’s competitiveness in the stubcoin market.