XRP lawyer Bill Morgan has directly confronted Senator Cynthia Lummis about a potential loophole in stablecoin legislation. The loophole could give Tether’s USDT an unfair advantage over American-issued stablecoins. Morgan’s challenge comes amid growing criticism of the Senator’s approach to cryptocurrency regulation.
Questioning Lummis’s Refusal to Meet Ripple CEO Brad Garlinghouse
Morgan questioned whether concerns over the controversial provision may be the reason Senator Lummis declined to meet with Ripple CEO Brad Garlinghouse. The XRP lawyer suggested the Senator may have wanted to avoid discussing how the loophole could benefit USDT while disadvantaging compliant American stablecoin issuers like Ripple’s RLUSD.
Is this why you didn’t want to talk to @bgarlinghouse yesterday. Did you think he may have wanted to discuss the loophole 👇 to allow USDT to have an advantage over stablecoins issued by American companies that must comply with US regulations, such as RLUSD issued by Ripple. https://t.co/B7HG3fDLhF pic.twitter.com/waOsOqKgUt
— bill morgan (@Belisarius2020) May 20, 2025
The confrontation escalated Morgan’s previous criticism of Lummis, whom he has labeled among the worst Bitcoin maximalists for her legislative approach. Morgan accused the Wyoming Senator of championing Bitcoin exceptionalism rather than creating fair regulatory frameworks for all cryptocurrencies.
GENIUS Act Creates Regulatory Disparity
According to the document Morgan referenced, the current draft of the GENIUS Act contains language that could allow offshore stablecoin issuers to circumvent U.S. regulations. The bill allegedly permits companies to issue stablecoins offshore while avoiding compliance requirements imposed on domestic operators.
The text suggests that while the legislation aims to prevent offshore companies like Tether from evading U.S. regulations, recent changes have weakened these protections. The draft reportedly allows foreign stablecoins to be traded on U.S. decentralized exchanges even if issued by companies that refuse to comply with American court orders regarding terrorist financing and money laundering.
Ripple’s RLUSD Faces Disadvantage Amid Regulatory Uncertainty
This provision could create a competitive disadvantage for U.S.-based stablecoin issuers like Ripple, which must comply with all domestic regulations for their RLUSD stablecoin. Meanwhile, offshore issuers like Tether could potentially maintain market access without meeting the same compliance standards.
Morgan’s suggestion that the stablecoin loophole influenced Lummis’s decision to cancel her meeting with Garlinghouse adds a new dimension to the controversy. The Ripple CEO had planned to discuss pro-crypto legislation and market structure during his Washington visit.
Garlinghouse had publicly challenged Lummis to reconsider her position and noted that, as Chair of the Digital Assets Subcommittee and Senator from crypto-friendly Wyoming, she should lead efforts supporting all cryptocurrencies, not just Bitcoin.
The canceled meeting has drawn criticism from industry observers who view it as evidence of Lummis’s narrow focus on Bitcoin rather than broader crypto ecosystem development. Critics argue that the GENIUS Act’s current structure could undermine U.S. competitiveness in the stablecoin market.
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