Key Takeaways
Tether’s USDT is just 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 problem a brand new stablecoin centered on the U.S. market.
U.S. President Donald Trump signed the stablecoin invoice, the GENIUS Act, into regulation 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 approach to ‘replace archaic fee rails’ with ‘revolutionary’ stablecoin fee methods. He added,
“For each digital greenback in a crypto pockets, there might be a conventional greenback reserved in a US checking account, creating trillions of {dollars} of demand for U.S. Treasuries.”
With clear guidelines, now the main focus 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 grew to become regulation, Nic Carter, accomplice at crypto-focused VC Crystal Island Ventures, said,
“Beneath 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 fee stablecoin to an individual within the U.S., until the stablecoin is issued by a permitted fee stablecoin issuer.”
Moreover, the regulation 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 12 months, J.P. Morgan reported that Tether’s reserve backing was solely 84% compliant with the GENIUS Act at the moment. This was based mostly 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 wanting the 100% reserve compliance.
The Q2 2025 reserves report confirmed that Tether’s money and T-bills publicity accounted for 81.49% and the remainder was in Bitcoin [BTC], treasured metals, and loans.
Supply: Tether’s Q2 reserves report
That mentioned, final month, Ardoino stated that USDT might 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 businesses just like the Federal Reserve and the Treasury Division are anticipated to problem rules implementing the Act inside six months, per Pillsbury Law.
“These rules will seemingly be finalized and grow to be operational by early to mid‑2026, as specified within the promulgated rules.”
