Brian Armstrong, CEO of U.S. cryptocurrency exchange Coinbase, believes that upcoming U.S. stablecoin regulations may require stablecoin issuers to fully collateralize their dollar-denominated tokens with U.S. Treasuries, a move that could make it more difficult for offshore companies to serve the U.S. market.

In an interview with The Wall Street Journal at the World Economic Forum (WEF) in Davos, Switzerland, Armstrong said he expects stablecoin laws to become clearer in the near future, with two requirements likely to include all U.S.-based stablecoin operators fully backing their stablecoins with U.S. Treasury bonds and completing regular audits.

Armstrong singled out Tether, the issuer of the U.S. dollar stablecoin USDt, as the company that could face the most pressure or challenges from new regulations. He said that if Tether fails to comply with any new US regulations, Coinbase will delist USDt.

In the meantime, Coinbase intends to continue offering USDt services to help customers gain exposure to other crypto assets. Armstrong said:

“There are a lot of people using Tether, and if we want to help them transition to a system that we think is more secure, we want to provide them with a way to exit.”

According to Cointelegraph, Coinbase previously removed USDt and other non-compliant stablecoins from Europe in response to the EU’s Markets in Crypto-Assets Directive (MiCA). However, a Coinbase spokesperson told Cointelegraph that the exchange could potentially relist the stablecoins if they “meet MiCA’s compliance standards at a later date.”