The GENIUS Act has reached its first anniversary without U.S. federal regulators finishing the rules that were supposed to implement the stablecoin law, leaving Tether and other foreign issuers with a narrowing window to sort out how they plan to comply.
That gap matters most for USDT. Under the broad structure of the law, the token would need major changes to remain in line with U.S. standards, and CoinDesk reported that if Tether does not substantially revamp its setup over the next two years, the stablecoin could be pushed out of U.S. markets.
The Guiding and Establishing National Innovation for U.S. Stablecoins Act became law one year ago when President Donald Trump signed it. The first anniversary, which passed on Saturday, was supposed to coincide with completed federal rulemaking. That has not happened. The result is a law that is in force, but still leaves issuers and platforms without final regulatory text from the agencies that are meant to administer it.
Even so, the direction of travel is already clear enough to create pressure. CoinDesk said the law’s standards would require the most widely circulated stablecoin, Tether’s USDT, to make substantial adjustments before it could satisfy the regime. Last year, CEO Paolo Ardoino told CoinDesk at the White House, just after Trump signed the bill into law, “Tether will comply with the GENIUS Act.” At the time, he said the company would pursue a separate U.S.-specific token and that USDT would also be managed to meet the law’s foreign-issuer requirements.
A year later, Tether has not publicly shown a dramatic shift toward those demands. CoinDesk said representatives of the El Salvador-based company did not respond to multiple recent requests for an update on its compliance position.
Reserve composition remains a central issue
The current stablecoin fight is still largely a contest between two firms, with a handful of others, including the issuer tied to President Donald Trump’s World Liberty Financial, battling for a distant third place. Tether’s main rival, U.S.-based Circle, appears to have done more to position itself ahead of the U.S. rules.
Tether’s latest disclosures suggest that as much as a quarter of USDT reserves are still allocated to assets that would not satisfy GENIUS standards, including precious metals, lending and bitcoin holdings. CoinDesk listed bitcoin at BTC $64,375.30 in that context. The law requires issuers to be fully reserved in the most liquid and reliable assets, essentially cash and U.S. Treasuries.
Tether this year rolled out USAT, a token designed with U.S. standards in mind and issued through its U.S. banking partner, Anchorage Digital. For now, CoinDesk said, usage remains relatively low.
Kevin Wysocki, head of policy at Anchorage Digital, said, “Non-compliant stablecoins cannot be used by U.S. institutions when the safe harbor expires in 2028, but we don’t expect the market to wait.” He added that Anchorage expects institutional users to move toward “compliant, bank-issued digital dollars well ahead of that deadline.”
Do foreign issuers actually have two years?
The GENIUS Act included a three-year grace period, which leaves roughly two years from now before U.S. crypto platforms are barred from offering stablecoins whose issuers have not checked every regulatory box. The harder question is whether foreign issuers get that same full period.
Some finance lawyers believe Tether has until July 18, 2028, to complete compliance. Others have argued that foreign issuers may need to satisfy at least some obligations as soon as GENIUS becomes fully effective, which CoinDesk said is likely about six months away, in January.
Justin Levine, a lawyer at Davis Polk who advises clients on stablecoin matters, told CoinDesk: “Upon the effectiveness of the GENIUS Act, foreign issuers will need to immediately comply with lawful orders to seize and freeze coins held by illicit actors, but they will have a runway of approximately two more years to prepare for the additional requirements so that their coins may remain eligible for listing on U.S. centralized trading platforms.”
Levine said one of those remaining requirements, registration with the Office of the Comptroller of the Currency, is likely to require a “significant undertaking.” He added: “So they do have time, as long as they comply with seize and freeze orders.” He also said issuers that want their coins to keep trading on U.S. centralized venues and retain that liquidity should be working on the issue now, even if delistings are not yet imminent.
That two-year reading has been adopted by Levine’s firm and others. But CoinDesk noted that Paul Hastings published an analysis last year that read GENIUS as setting separate timelines for foreign and domestic firms. After CoinDesk recently asked about that interpretation, the language was removed from the firm’s website, and its spokespeople did not immediately respond to requests for clarification.
A footnote in federal regulatory materials also points to a two-track timeline. The Office of the Comptroller of the Currency, which will supervise certain stablecoin issuers, said in a footnote to a proposal implementing parts of GENIUS that the general end date is in 2028, but that the clock may start as soon as the law becomes effective, by January, for foreign-issued coins that fail to meet “certain requirements.” CoinDesk noted that those requirements may refer to the near-term obligations to freeze illicit actors’ assets and, when the government requests it, seize them.
The fuller foreign-issuer framework eventually goes beyond that. It will include a requirement that the issuer’s home regulator be certified by the Treasury secretary as “comparable” to the U.S. regime, that the issuer register with the OCC and that reserves be held in U.S. institutions.
Regulators are behind schedule, and exchanges may split on enforcement risk
None of the relevant federal agencies has finalized its GENIUS rules. That leaves uncertainty over what will ultimately be embedded in binding regulation even as the first obligations approach. Some rulemaking efforts are already under way and may be completed soon. Others are still in preliminary stages. For companies, that means there is still no final rulebook to follow.
Trevor Tanifum, a managing principal at consulting firm FS Vector, said that if disagreement over the GENIUS timeline continues, smaller platforms with lower risk tolerance may decide to delist certain stablecoins rather than deal with the uncertainty. Others may choose a different path.
In his view, larger firms with stronger legal teams may effectively take the position that, “We’re going to spend the money on lawyers and lobbyists until someone walks up to our door and forces us to delist these non-U.S. issuers.”
Tanifum added, “It’s pretty much what has happened, I think, at every major crypto hurdle.” He said platforms still rely heavily on transaction volumes and liquidity from non-U.S. issuers, and he does not see them giving up that business without resistance.
Coinbase, the largest U.S. exchange, declined to discuss its stablecoin listing plans under GENIUS, according to CoinDesk.
Attention is also shifting to the Clarity Act
Exchanges and much of the broader crypto industry have recently shifted policy attention toward another congressional effort, the Digital Asset Market Clarity Act. Industry lobbyists had aimed to pair GENIUS with Clarity, and they succeeded last year in getting the stablecoin bill signed into law.
But GENIUS was meant to sit alongside a wider framework for U.S. crypto market regulation under the Clarity Act, which CoinDesk said is still stuck in the final weeks of its potential 2026 congressional window. At GENIUS’s first anniversary, it remains unclear whether that companion bill will also make it onto the books. If it does, CoinDesk reported, it will likely include provisions that rewrite parts of the GENIUS language.
Either way, Tether, Circle and the rest of the stablecoin sector are moving toward federal oversight in the coming months under the new law. How issuers and platforms handle those rules could reshape which firms hold the leading positions in the market.