Tether is subject to a three-year timeline following the Genesis Act's enactment as federal law in the United States
In a significant move, Tether, a leading player in the digital currency market, has announced plans to issue a new stablecoin specifically designed for the U.S. market. This decision comes in the wake of the GENIUS Act, a stablecoin bill that was signed into law by President Donald Trump on July 18.
Tether's CEO, Paolo Ardoino, revealed that the new stablecoin will feature a yield-sharing mechanism, similar to other issuers in the market. However, details about the name of the new stablecoin and its launch date are yet to be disclosed.
The GENIUS Act, a historic shift for regulated issuers of digital dollars on blockchain rails, requires digital asset service providers (DASPs) to meet several stringent conditions to issue a payment stablecoin in the U.S. These include maintaining a 1:1 reserve backing for the stablecoin, satisfying public disclosure obligations, operating under federal or state regulatory supervision, and complying with anti-money laundering (AML) programs, record retention, and suspicious activity monitoring. DASPs must also ensure that the issuance does not pose a material risk to U.S. financial stability or banking system safety and must meet data use and anti-tying standards, as well as implementing customer identification programs for due diligence.
Under the GENIUS Act, Tether's current stablecoin, USDT, will have a three-year window to comply with the new regulations. Tether plans to do so by registering USDT through the foreign issuer pathway, as it is currently issued from El Salvador. The company will need to establish an effective AML program, audited reserves, and comply with the new regulatory framework.
As of the Q2 2025 reserves report, while Tether has not historically completed fully audited reserves, it will undertake new auditing regimes and adjustments to its reserves to comply with the 1:1 backing and transparency requirements set forth in the GENIUS Act.
Federal agencies like the Federal Reserve and the Treasury Department are expected to issue regulations implementing the GENIUS Act within six months. These regulations are anticipated to become operational by early to mid-2026.
David Sacks, crypto and AI czar, believes that the GENIUS Act will update archaic payment rails with revolutionary stablecoin payment systems. Sacks also stated that for every digital dollar in a crypto wallet, there will be a traditional dollar reserved in a US bank account, creating trillions of dollars of demand for U.S. Treasuries.
In a recent statement, Tether's CEO, Paolo Ardoino, dismissed reports about the firm's non-compliance with the GENIUS Act's reserve requirements. However, J.P. Morgan reported earlier in the year that Tether's reserve backing was only 84% compliant with the GENIUS Act at that time. Tether's Q2 reserves report shows that Tether's cash and T-bills exposure accounted for 81.49%, with the rest in Bitcoin [BTC], precious metals, and loans.
Tether's focus on the U.S. market comes as it plans to phase out its current form within three years, according to Nic Carter, partner at crypto-focused VC Crystal Island Ventures. Ardoino, however, has announced plans to introduce a separate U.S.-specific stablecoin designed to meet domestic standards alongside USDT.
This development marks a significant step for Tether and the digital currency market as a whole, as they navigate the regulatory landscape set forth by the GENIUS Act. As the regulations are finalized and implemented, we can expect to see more changes and adaptations from major players in the industry.
- Tether's CEO, Paolo Ardoino, has announced that Tether will issue a new stablecoin to comply with the GENIUS Act regulations, featuring a yield-sharing mechanism.
- The new stablecoin by Tether will be designed for the U.S. market, requiring the company to ensure its issuance does not pose a material risk to U.S. financial stability and meet data use and anti-tying standards.
- Tether plans to register its current stablecoin, USDT, through the foreign issuer pathway to comply with the new regulations within a three-year window.
- Tether's Q2 reserves report shows that Tether's cash and T-bills exposure accounted for 81.49%, with the rest in Bitcoin [BTC], precious metals, and loans.
- The future of Tether and the digital currency market will be shaped by the finalized and implemented regulations set forth by the GENIUS Act, with major players expected to make additional changes and adaptations.
