The GENIUS Act has reached its first anniversary, yet U.S. regulators have not met their deadlines for establishing regulations, which are set to take full effect by July 2028.
By Jesse Hamilton|Edited by Nikhilesh De Jul 19, 2026, 1:00 p.m. 6 min readMake preferred on ShareShare this articleCopy linkX (Twitter)LinkedInFacebookEmailMake preferred on The U.S. GENIUS Act to regulate stablecoins has reached a significant milestone, and Tether may need to enhance its compliance efforts. (Jesse Hamilton/CoinDesk)SummaryShow- The GENIUS Act, which governs U.S. stablecoin issuers, remains complex and is still evolving. With its first anniversary passed, Tether and other non-U.S. issuers have a two-year window to establish their compliance strategies.
- The one-year mark was expected to see federal financial regulators finalize their stablecoin regulations, but this has not occurred, leaving compliance unclear.
- However, the proposed U.S. standards would necessitate substantial changes for Tether’s USDT to align with the law.
Tether's USDT, the most prominent stablecoin by trading volume, faces potential exclusion from U.S. markets unless substantial modifications are made within the next two years.
Last year, CEO Paolo Ardoino assured that Tether would comply with U.S. regulations for USDT, but the company has yet to indicate significant movement toward fulfilling the requirements of the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, which was enacted one year ago.
As the anniversary of President Donald Trump's signing of the law approaches, the stablecoin sector has seen a rise in interest and issuance, alongside various crypto and traditional financial firms seeking U.S. trust bank charters to facilitate their stablecoin operations. However, the one-year timeline was also supposed to prompt regulators to implement GENIUS rules, which they have not yet achieved. This absence of clarity could lead to complications as experts and industry insiders express differing interpretations of the law's requirements.
Currently, Tether competes with one other major player, Circle, while additional firms, including World Liberty Financial, which is linked to President Trump, are vying for a distant third place. Circle has shown a more proactive approach in preparing for anticipated U.S. regulations.
Recent disclosures from Tether indicate that up to 25% of USDT's reserves—intended to ensure users can redeem their holdings—are still invested in assets that do not meet GENIUS Act requirements, such as precious metals and bitcoin BTC$64,454.43. The GENIUS Act mandates that issuers maintain reserves in highly liquid and reliable assets, specifically cash and U.S. Treasuries.
"Tether will comply with the GENIUS Act," Ardoino told CoinDesk at the White House shortly after the law was signed. He mentioned that Tether would consider creating a token specifically for the U.S. market while also ensuring USDT aligns with the law's standards for foreign issuers.
When asked for updates on its compliance status recently, representatives from Tether did not respond.
This year, Tether introduced USAT, a stablecoin designed with U.S. standards in mind, issued through its banking partner, Anchorage Digital. However, its adoption remains relatively low.
“Stablecoins that do not comply will be barred from use by U.S. institutions once the safe harbor period ends in 2028, but we anticipate that the market won't wait," stated Kevin Wysocki, head of policy at Anchorage Digital, a crypto-native bank managing several stablecoins. He believes institutional users will gravitate toward "compliant, bank-issued digital dollars well before that deadline."
Do they have two years?
The GENIUS Act provides a three-year grace period for compliance, meaning two years remain for issuers to meet regulatory requirements. Post this period, U.S. crypto platforms will no longer be able to offer stablecoins from issuers who fail to comply. However, there is some debate regarding whether foreign issuers will benefit from the same grace period. Some financial lawyers believe Tether has until July 18, 2028, to comply, while others argue that foreign issuers must adhere to the regulations as soon as GENIUS takes effect, likely in January.
"Once the GENIUS Act is effective, foreign issuers will need to comply immediately with lawful orders to freeze and seize coins tied to illicit activities, but they will have about two more years to prepare for additional requirements to keep their coins eligible for trading on U.S. centralized platforms," explained Justin Levine, a lawyer at Davis Polk specializing in stablecoin issues. He added that one of the forthcoming requirements—registration with the Office of the Comptroller of the Currency—will likely involve a substantial effort.
"They do have time, as long as they comply with seizure and freezing orders,” he continued. “However, those wishing to maintain trading access on U.S. platforms and retain liquidity should start preparing now, even if delisting isn't imminent."
While Levine and others interpret the foreign issuer deadline as two years away, a previous analysis from law firm Paul Hastings suggested differing timelines for domestic and foreign firms. However, that interpretation has since been removed from the firm's website, and representatives did not clarify their stance when approached by CoinDesk.
Examining federal regulators' documentation hints at a dual deadline process in the legislation. The OCC, which will oversee certain stablecoin issuers, noted in a footnote that the absolute deadline aligns with 2028 but is activated upon the law's implementation (expected by January) for foreign issuers failing to meet specified conditions. These conditions could simply relate to shorter-term demands for asset freezing and seizure when required by the government.
The complete set of requirements for foreign issuers will eventually entail that their home regulator be certified by the Treasury Secretary as "comparable" to the U.S. system, that firms register with the OCC, and that they maintain their reserves in U.S. institutions.
Regulators Lag Behind
Despite the pressing timelines, none of the federal agencies have completed their GENIUS regulations, creating uncertainty about what the final regulatory framework will look like as initial requirements draw near. While some regulators are advancing their efforts, others remain in preliminary stages. Consequently, companies currently lack definitive regulations to follow.
If confusion persists regarding GENIUS timelines, Trevor Tanifum, managing principal at consulting firm FS Vector, expects that smaller platforms with lower risk appetites may choose to delist certain stablecoins to avoid complications. Conversely, larger companies might adopt a different stance, believing, "We'll engage legal counsel and lobbyists until we are forced to delist these non-U.S. issuers."
"This has been the trend during every significant challenge in the crypto space," he noted. "These platforms still rely heavily on transaction volumes and liquidity from non-U.S. issuers, and I doubt they will relinquish that without resistance."
Coinbase, the largest U.S. exchange, has not commented on its stablecoin listing strategies in light of GENIUS.
Recently, the crypto industry has shifted its focus to another legislative initiative: the Digital Asset Market Clarity Act. The sector's lobbyists aimed for a coordinated effort with GENIUS and Clarity, successfully getting the stablecoin bill passed into law last year.
However, the initial crypto legislation was intended to complement broader regulatory measures for U.S. crypto markets under the Clarity Act, which is still pending in Congress as the 2026 session approaches its conclusion. It remains uncertain whether this companion bill will be enacted alongside GENIUS, and if it is, it may include amendments that alter some of GENIUS's provisions.
Regardless, Tether, Circle, and the broader stablecoin market are poised for federal regulation in the upcoming months, and how these regulations are managed could significantly impact which companies emerge as leaders in the space.
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