The new GENIUS stablecoin bill proposes to bring Tether, the issuer of USDT, under US jurisdiction. The bill has significant implications for cryptocurrency regulation.
Overview of the GENIUS Act
The GENIUS Act requires stablecoins to be fully backed 1:1 with US dollars or approved liquid assets, thereby creating a robust regulatory framework. It also mandates transparent redemption policies and stability of the stablecoin's value relative to the US dollar.
Challenges and Revisions
Despite initial bipartisan support, the GENIUS Act faced hurdles in the Senate. The bill stalled on May 8, 2025, amid concerns about regulating foreign stablecoins and strengthening anti-money laundering provisions. Democrats expressed concern after revelations about World Liberty Financial planning to use its stablecoin in a deal with an Abu Dhabi investment firm.
Implications for Tether and the Crypto Industry
The GENIUS Act's provision to bring foreign stablecoin issuers like Tether under US jurisdiction indicates a move toward stricter regulatory oversight. This may influence the entire crypto industry, potentially setting a precedent for how the US regulates foreign entities in its financial system.
As the GENIUS Act is discussed in the Senate, its progress will be closely watched by stakeholders in the financial and crypto sectors, affecting Tether and other stablecoin issuers.
