The U.S. Congress is proposing the GENIUS Act aimed at regulating operations with stablecoins. This legislation mandates issuers to back their tokens with low-risk assets, affecting current market practices.
GENIUS Act's Reserve Requirements for Stablecoins
The GENIUS Act introduces stricter rules for stablecoins, requiring their reserves to be backed by cash and U.S. Treasury bonds. Large issuers are also mandated to publish audited annual financial reports. These requirements challenge Tether's existing reserve management practices.
Tether’s Compliance Challenges with New Legislation
Currently, Tether holds a 66% share of the stablecoin market, but USDT is partially backed by Bitcoin and gold. The new requirements raise questions about Tether's reserve strategies and its potential ability to continue operating in the U.S.
Market Reactions to the Bill
Experts indicate potential volatility for USDT due to the introduction of the GENIUS Act. Risks of operation under new regulations are being discussed while the company has not released any official statements regarding its next steps. The emergence of new stablecoin audit technologies is also seen as a possible positive outcome of the new legislation.
The GENIUS Act represents a significant change for the stablecoin market in the U.S., requiring greater transparency and reliability from issuers. This may impact Tether and other companies operating in this field.
