One year after the signing of the United States GENIUS Act, whether USDT under Tether will remain on the United States encryption platform is once again a market concern. The legal community still has different interpretations around the point of compliance of foreign stable issuers, but the prevailing view is that Tether still has time to complete most of the requirements.
Major transition period until 2028
The bill introduced a three-year transition period for the issuer of the stable currency, with the overall deadline pointed to July 2028. However, some of the obligations may not be set in motion until the end of the transition period with respect to a stable currency that is issued abroad, such as the USDT.
According to CoinDesk, citing counsel's opinion, after the Act enters into force, foreign issuers may need to immediately cooperate with United States law enforcement authorities to enforce freezing and seizure orders against assets involved in illegal activities. As to whether or not to continue the listing on the United States Centralized Trading Platform, the requirements are expected to land later.
A lawyer who has long provided legal services for money-stable regulation indicated that foreign issuers need to start preparing now if they wish to maintain their mobility on United States platforms, as the follow-up requirement also includes registration with the United States Monetary Supervisory Authority, which is in itself a heavy-volume arrangement.
The trading platform may be adjusted earlier
The report mentions that the regulations are still not fully finalized, leaving much room for judgement on the trading platform. Some of the less-at-risk platforms may go down by the official cut-off date with the non-compliant stabilization currency, while large platforms with more adequate legal resources may wait until the regulatory calibre is clearer.
Earlier proposals issued by the United States Monetary Supervisory Authority also indicated that 2028 remained the overall compliance period, but that certain requirements against foreign issuers would be triggered earlier when the bill came into force. The focus, which has been repeatedly mentioned at this stage, is primarily on the freezing and seizure of assets in cooperation with law enforcement.
- Registered to the United States Monetary Agency
- Deposit of reserve assets with United States financial institutions
- Accept domestic regulation comparable to United States standards
Tether has not yet published the full path
As compared to the Circle, which is actively aligned to the new framework, Tether has not yet publicly explained how USDT will fully meet the new US rules. Tether's CEO, Paolo Ardoino, said last year that the company would comply with the GENIUS Act and plan to introduce independent coins for the US market, while allowing USDT to meet the requirements of foreign issuers.
The Act makes clearer requirements for a currency reserve for compliance, with a focus on highly liquid assets such as cash and short-term United States Treasury bonds. This is also a constant concern for Tether's reserve structure.
At a time when United States regulatory rules were not yet fully in place, Tether had introduced the United States market-oriented Stable Currency USAT and continued to advance business payments and cross-border settlement operations. However, the size of USAT is still significantly smaller than that of USDT in the current situation.
It's still expanding outside the United States.
While the United States compliance issue has not yet been resolved, Tether has recently accelerated investment and payment patterns in several markets. This month, the company received $7 million in financing from Pact Labs, and plans to connect USAT to the United States payroll infrastructure.
In the business landscape, Modern Motor America and Mexico recently completed a $20,000 cross-border financial pilot transfer through the Avalanche block chain, using the USDST. Latin America is also the focus region of Tether, where companies recently invested in Mercado Bitcoin, the Brazilian Exchange, and Ualá, the Digital Bank of Argentina.
However, the expansion of Tether overseas is not a substitute for the regulatory requirements it needs to face in the United States market. Since the accompanying rules of the GENIUS Act have not yet been fully completed, the eventual retention of USDT on United States trading platforms for a long period of time will depend on the pace of subsequent compliance by Tether and on clearer guidance from United States regulators.