Tether’s
is the world’s leading stableecoin. Its digital emulation of the US dollar – 155 billion of them at the last count – is unmatched. But as things stand, Tether almost certainly does not meet the demands of the US legislators as they are expected to push the law closer to the law on Tuesday afternoon.
Tether may end up with a choice to make: jump through some serious hangers to reach accord with the future law, or stand back and try to hold on to non-American market share as US industry potentially rises in scale, and the federal government takes its usual role in governing the legislative demands of other jurisdictions around the world, according to experts.
Guidance and establishment of National Innovation for US StableCeCoins from the 2025 (Genius) Act is the US Senate’s bill, which is facing its last path to passage Tuesday, which is a first for major crypto law. Then it leads to the House of Representatives to be approved or need to be worked on. In the end, both chambers have to ok the same language for President Donald Trump to sign it in the law.
In its current form, the legislation leaves a path for foreign stableecoin issuers in the United States, but it can be complicated. To a large extent, if companies like Tether want to offer their symbols to US users, they must be regulated by a foreign regime approved as having similar standards like the United States as well – depending on the final language – they would probably need to register with and be monitored by the office for Comptroller for Currency, a federal bank regulator, plus maintain “reserves Clean -up requirements for US customers “in a collapse.
All issuers monitored by the potential law should follow strict reserve standards and maintain cash, treasuries and other related, very significant assets that match their issue one-for-one. They also had to be reviewed monthly by a registered public accounting company and the results certified by the CEO and CFO of the company, which means that the top leaders would be subject to legal responsibility for misleading the public. It is an unusually robust supervision that requires more frequent public insurance policies from stablecoin issuers than other financial institutions.
In addition, companies must fulfill the full package of money-facing controls that US financial companies are facing.
No haste with tether?
“I’m, if I’m tied, I don’t want to rush into the US and say, ‘I’m sure I’ll be part of this and I’ll play in this game,’ until I know what the rules are,” said Steve Gannon, a lawyer working with digital assets clients at Davis Wright Traine, in a Coindesk interview. “The influence of the downstream on Tether, in terms of having to comply with these rules, can be a very significant investment of time, forces, people, money and technology.”
In the end, Tether – one of the most lucrative companies in the world – can continue to focus on new markets where the genius law would have a bit of a sway. Tether has recently placed his headquarters in Crypto Haven El Salvador, which is obviously not one of the global standouts in financial regulation.
Still, US legislation gives a huge discretion to the secretary of the Treasury to make calls for what countries have good enough rules and whether certain companies can get different exceptions.
“Trump -administrationen, for eksempel, kunne slå en gensidighedsaftale med Bukele -regimet i El Salvador, hvor Tether er baseret, hvilket giver mulighed for at slå fuld adgang til det amerikanske marked, mens de overskrider kravene i lovforslaget,” ifølge talepunkter, der blev frigivet af lejren for en af lovforslagets chefmodstandere, senator Elizabeth Warren, den ranking demokrat på The Senate Bank Committee.
“It’s hard to imagine that El Salvador is creating a regime that is so sophisticated and as certain as whatever US regime would be, even as weak as this is,” said Corey Fryer, director of investor protection in the Consumer Federation of America and a former crypto policy adviser at US Securities and Exchange Commission. “And yet they would still be eligible for the current set of regulators to be assigned reciprocity and treated as if they were subject to the same standards.”
Despite their strong rhetoric, Warren and her allies were unable to stop many of their democratic colleagues in supporting the bill, as the advocates claim, would at least begin to supervise and control this important part of the industry.
The Bill’s critics claim that it still allows a large loophole for unregulated foreign stableecoins to be circulated on decentralized crypto platforms in the United States
“Unfortunately, the Genius Act is expanding the massive market for stableecoins while not treating the basic national security risks designated,” Warren said in a speech last week on the Senate floor. “It also includes shiny logging holes that would give Tether, a notorious foreign stableecoin issuer, now based in El Salvador, access to American markets.”
Tether’s American project
However, Tether CEO Paolo Ardoino has signaled in recent weeks that the company may not be trying to get its market-leading token into the United States as a direct issuer and instead mulls a US-based offshoot settlement table that could be fully regulated.
American regulation would be a lot to bite off for tether, which is nowhere near to control these boxes. The company did not respond to a request for a comment to the Genius Act, but Tether warned its users in its online fine print updated this year: “If Tether does not comply with changed regulatory regimes, Tether and its affiliated companies may be subject to legislative actions, which may have a negative impact on tether and its ability to operate.”
While the Senate’s progress is a massive and unprecedented political victory for the sector for digital assets, a high amount of uncertainty remains because Parliament will have its own expression and the most important companion legislation – the bill that would establish rules for the rest of the crypto – is still being prepared. StableCOin issuers do not receive final answers about their US rules until a law clears Trump’s desk and the relevant federal agencies then transforms it into specific rules.
“The Path Forward for Foreign Issuers Will Face Two Hurdles, Neither of which are known to present: (1) What the Final Law Allows Foreign Issuers to DO VIS-JO-VIS US CUSTOMERS, AND UNDER What Conditions, and (2) How Any Related Regulatory Discretion is Exercised To Permit or Restrict to ACCESS TO THE US Market, “Said Richard Rosenthal, a Principal at Deloitte Who Focuses on Digital Assets Regulations In The Banking Sector, In An Email To Coindesk. “This is a politically disputed area and it is back to see how this will play out.”
Fryyer, however, told Coindesk that it is unlikely that landlords will make things less tasty for Tether – especially in the light of the company’s allies in Trump’s administration, Trade Secretary Howard Lutnick, whose previous role on top of broker Cantor Fitzgerald saw him administer Tether’s United States.
“I don’t think there’s any world where the house is forcing something that takes ties further,” said Fryer, though he added that if Giant Non-Bank competitors start launching stablecoins, such as Google and Amazon, “there may be a certain incentive for parliament to do more about that question.”
Competition circles?
US COMPANY CIRCLE AND ITS
Have been waiting in the wings to seize the market share from the Chief Competitor Tether, and Circle intends to be in what some expect to be an American crypto wave after regulation. If institutional investors and traditional financial companies embrace digital assets that the industry hopes, Tether can miss this action if it continues to remain outside the US financial system.
Earlier this year, the US SEC added some stableecoins to its growing list of crypto projects that the agency sees as landing outside its concern. However, there was a bit of a warning sign to Tether in the agency’s statement.
Even as the regulator-driven by crypto-friendly leaders since the election of Trump-rejected stableecoins as well as outside its securities jurisdiction, it indicated in a footnote that appropriate stableecoinreserer “does not include precious metals or other crypto assets”, both of which are part of Tether’s reserves. Genius Act explicitly declares that “Payment StableCoins are not securities or raw materials and permitted issuers of Payment StableCoin are not investment companies, but it is not yet the law.
Such considerations are technically beyond Tether’s concern in its current business model, which deliberately remains away from direct contact with US customers. For now.
