Tether's USDT Faces 2-Year Countdown Under GENIUS Act
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- Tether faces a two-year countdown under the GENIUS Act to overhaul USDT or risk exclusion from U.S. crypto platforms, with the law hitting its first anniversary on Saturday after President Trump's signing.
- Federal financial regulators have missed the one-year deadline to finalize stablecoin rules, leaving companies with no regulations to comply with yet even as the law approaches its initial effective date.
- Tether's most recent disclosures show as much as a quarter of USDT's reserves sit in assets that won't meet GENIUS Act standards, including precious metals, lending and bitcoin.
- CEO Paolo Ardoino pledged at the White House a year ago that Tether would comply with the law and indicated a separate U.S.-specific token, but the company declined to answer recent requests for an update on its compliance posture.
- Circle, Tether's U.S.-based rival, has made more of an apparent effort to pre-comply with the standards GENIUS is expected to require.
- Tether rolled out USAT this year through U.S. banking partner Anchorage Digital, but the token remains at relatively low usage levels.
- Lawyers remain split on whether foreign issuers like Tether get until July 18, 2028 to comply, or whether they must comply the moment GENIUS takes effect — likely January — with Davis Polk and Anchorage Digital leaning toward the longer runway.
Why it matters: With up to a quarter of USDT's reserves in non-compliant assets and its CEO silent on remediation, Tether's grip on the U.S. market is contingent on either overhauling reserves, securing OCC registration, or building compliant infrastructure like its low-volume USAT token. Circle, which has visibly moved toward pre-compliance, sits in position to consolidate market share, while smaller U.S. platforms are expected to delist non-compliant stablecoins early even as major exchanges like Coinbase may press to keep them on the books.
