Tether’s USDT Faces 3-Year Deadline: Will It Survive?

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Key Takeaways

Tether’s USDT is only 81.5% compliant with the GENIUS Act, per the Q2 reserves report. But hey, at least they’re 81.5% of the way to “figuring this whole ‘money’ thing out,” right? 🎉

U.S. President Donald Trump signed the stablecoin bill, the GENIUS Act, into law on the 18th of July. Because nothing says “let’s make things clearer” like a 300-page legal document that even lawyers avoid reading. 📜

Crypto and AI czar David Sacks hailed it as a way to ‘update archaic payment rails’ with ‘revolutionary’ stablecoin payment systems. He added,

“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.”

Translation: “Let’s turn every crypto wallet into a piggy bank… but fancier.” 🏦

With clear rules, now the focus will shift to potential issuers, and the dominant player, El Salvador-based Tether (USDT), has hit headlines again. Because nothing says “stability” like a company that treats compliance like a game of Whack-a-Mole. 📦

Tether’s 3-year window and U.S. plans

Commenting after the bill became law, Nic Carter, partner at crypto-focused VC Crystal Island Ventures, said,

“Under GENIUS, Tether (in its current form), would be phased out from being used by domestic service providers within 3 years.”

Which is just a fancy way of saying, “Time’s up, kiddo.” ⏳

Carter was referencing the GENIUS Act, section 3(b), which states,

“Beginning 3 years after enactment, it shall be unlawful for a digital asset service provider to offer or sell a payment stablecoin to a person in the U.S., unless the stablecoin is issued by a permitted payment stablecoin issuer.”

In English: “You can’t play unless you’ve got the golden ticket. And no, Bitcoin stashes and gold bars buried in the backyard don’t count.” 🚫

Additionally, the law requires that the issuer hold 100% of the reserves in cash, cash equivalents, or U.S. short-term treasury bills (T-bills). Because apparently, math is hard. 💸

Earlier in the year, J.P. Morgan reported that Tether’s reserve backing was only 84% compliant with the GENIUS Act at that time. This was based on its T-bills, cash, and cash equivalents.

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So, 81.49% compliant. Let’s call it “early access” mode. 🚀

Last month, Ardoino stated that USDT will be focused on emerging markets, but Tether will explore a new stablecoin for the U.S. market with a yield-sharing feature like other issuers. Because why not? It’s not like they’ve got anything to lose. 😏

Meanwhile, federal agencies like the Federal Reserve and the Treasury Department are expected to issue regulations implementing the Act within six months, per Pillsbury Law.

“Those regulations will likely be finalized and become operational by early to mid‑2026, as specified in the promulgated regulations.”

Which means we’ll all be waiting on the edge of our seats… or napping. 🥱

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2025-07-19 21:17