Tether faces 3-year deadline as GENIUS Act becomes U.S. law
Key Takeaways
Tether’s USDT is barely 81.5% compliant with the GENIUS Act, per the Q2 reserves report. However Tether nonetheless has a 3-year window. The CEO lately said that they’ll subject a brand new stablecoin centered on the U.S. market.
U.S. President Donald Trump signed the stablecoin invoice, the GENIUS Act, into legislation on the 18th of July. This marked a historic shift for regulated issuers of digital {dollars} on blockchain rails.
Crypto and AI czar David Sacks hailed it as a option to ‘replace archaic cost rails’ with ‘revolutionary’ stablecoin cost programs. He added,
“For each digital greenback in a crypto pockets, there will likely be a standard greenback reserved in a US checking account, creating trillions of {dollars} of demand for U.S. Treasuries.”
With clear guidelines, now the main target will shift to potential issuers, and the dominant participant, El Salvador-based Tether (USDT), has hit headlines once more.
Tether’s 3-year window and U.S. plans
Commenting after the invoice turned legislation, Nic Carter, companion at crypto-focused VC Crystal Island Ventures, said,
“Below GENIUS, Tether (in its present type), can be phased out from being utilized by home service suppliers inside 3 years.”
Carter was referencing the GENIUS Act, part 3(b), which states,
“Starting 3 years after enactment, it shall be illegal for a digital asset service supplier to supply or promote a cost stablecoin to an individual within the U.S., until the stablecoin is issued by a permitted cost stablecoin issuer.”
Moreover, the legislation requires that the issuer maintain 100% of the reserves in money, money equivalents, or U.S. short-term treasury payments (T-bills).
Earlier within the yr, J.P. Morgan reported that Tether’s reserve backing was solely 84% compliant with the GENIUS Act at the moment. This was primarily based on its T-bills, money, and money equivalents.
In response, Tether CEO, Paolo Ardoino, dismissed the report and said that the agency was very liquid with over $1B in quarterly earnings from T-bills curiosity alone.
Now, in mid-2025, the agency was nonetheless in need of the 100% reserve compliance.
The Q2 2025 reserves report confirmed that Tether’s money and T-bills publicity accounted for 81.49% and the remaining was in Bitcoin [BTC], valuable metals, and loans.
Supply: Tether’s Q2 reserves report
That stated, final month, Ardoino stated that USDT will likely be centered on rising markets, however Tether will discover a brand new stablecoin for the U.S. market with a yield-sharing function like different issuers.
In the meantime, federal companies just like the Federal Reserve and the Treasury Division are anticipated to subject laws implementing the Act inside six months, per Pillsbury Law.
“These laws will seemingly be finalized and turn into operational by early to mid‑2026, as specified within the promulgated laws.”
