On June 17th in the afternoon Eastern Time, the U.S. Senate passed the "GENIUS Stablecoin Act" (Guiding and Establishing National Innovation for U.S. Stablecoins Act) with bipartisan support. This marks the first time the Senate has passed significant legislation targeting the cryptocurrency industry, which will next be submitted for consideration by the House of Representatives. If it passes without amendments, it will soon be presented to President Trump for signing into law.
This legislation not only mandates transparency but also introduces stricter regulations for the operation of stablecoins, placing them under the close supervision of the U.S. government. This article will analyze the key points of the "GENIUS Act," its impact on the current stablecoin giant Tether, and the development space it opens up for compliant competitors.
Core Interpretation of the Bill
GENIUS is a comprehensive regulatory framework for stablecoins proposed by Tennessee Senator Bill Hagerty. The bill will regulate payment stablecoins (i.e., digital assets that are pegged to a fiat currency unit such as the US dollar, with issuers committing to redeem them at a fixed value).
According to the legislation, only "approved stablecoin issuers" (subsidiaries of insured banks or qualified issuing institutions) and specific "foreign payment stablecoin issuers" (registered in countries recognized by the U.S. regulatory framework) can operate in the U.S. It is worth noting that the legislation prohibits payment stablecoins from paying interest to holders (some views argue that paying interest could make them securities) and does not apply to fiat currency, bank deposits, or securitized assets.
All stablecoin issuers must hold the following reserve assets at a ratio no lower than 1:1: US dollar cash, Federal Reserve deposits, bank demand deposits, Treasury bonds maturing within 93 days, or overnight reverse repurchase agreements.
In addition, issuers must not misappropriate reserves and are required to publish reserve proof audited by a registered accounting firm every month, while also complying with the Bank Secrecy Act.
Due to the backing of high-quality assets, the probability of loss is much lower than that of bank deposits. Payment stablecoins are not included in the FDIC insurance scope, and the bill strictly prohibits issuers from making misleading claims. It is worth noting that GENIUS allows individuals to self-custody stablecoins, and it does not involve legitimate transfers between individuals without intermediaries or transactions between domestic and foreign accounts of the same entity.
The bill restricts the rights of tech giants to issue stablecoins, such as Meta (formerly Facebook), Amazon, and other listed companies, unless they meet financial risk and data privacy standards.
The impact on Tether
Currently, the world's largest stablecoin issuer, Tether (USDT), may be the company most severely impacted. As it stands, Tether is almost certainly unable to fully meet the requirements in GENIUS.
According to its latest quarterly reserve report (2025Q1), USDT is only about 85% backed by cash and cash equivalents, failing to meet the 100% requirement of the GENIUS Act. Furthermore, its auditing firm BDO Italia does not meet the standards of the Public Company Accounting Oversight Board (PCAOB), further exacerbating compliance hurdles.
For a long time, Tether has been the focus of debates on stablecoin transparency and security. Despite claims of being fully backed by reserves, Tether has faced scrutiny over the lack of transparency regarding the composition of its collateral. The company has been under investigation by U.S. regulators, and the legitimacy of its reserve backing has also been called into question.
Tether CEO Paolo Ardoino recently hinted that the company may not allow the market-leading USDT to enter the United States directly, but is considering launching a fully regulated domestic settlement stablecoin branch.
According to previous reports by BitPush, Tether has recently moved its headquarters to the crypto haven of El Salvador, and this one of the world's most profitable companies may continue to focus on emerging markets with limited impact from the "GENIUS Act."
Richard Rosenthal, the head of Deloitte's digital asset regulatory business, believes that foreign issuers face two unknown obstacles regarding this bill: 1) what activities and conditions the final law will allow foreign issuers to conduct with U.S. customers; and 2) how the relevant regulatory discretion will be exercised to allow or restrict entry into the U.S. market. This is a politically sensitive area, and the outcome remains to be seen.
Can the House of Representatives pass it?
Despite the substantial progress made with the Senate's passage of the GENIUS Act, the next challenge lies with the House of Representatives. The House Financial Services Committee has already advanced its own stablecoin legislation—the Stablecoin Transparency and Better Ledger Economic Accountability Act. However, it has yet to be submitted for a full House vote, and lawmakers may choose to support the GENIUS Act over their own version.
The broader discussion around stablecoin and cryptocurrency regulation is becoming increasingly politicized, especially with the Trump family's involvement in the crypto space, and the deepening relationship with crypto companies (such as World Liberty Financial and its stablecoin) has sparked discussions about potential conflicts of interest.
In addition, critics point out that the bill still has significant loopholes that allow unregulated foreign stablecoins to circulate in the U.S. through decentralized platforms.
The main opponent of the bill, senior Democratic senator Elizabeth Warren of the Senate Banking Committee pointed out:
"The Trump administration could sign a reciprocal agreement with the Bukele regime in El Salvador where Tether is located, allowing Tether to fully enter the U.S. market while circumventing the requirements of the bill... If Congress does not amend the GENIUS Act, billionaires like Elon Musk and Jeff Bezos will be able to issue stablecoins that track user spending data and squeeze out competitors. When this bubble eventually bursts, they will inevitably come back to beg taxpayers to foot the bill."
Despite the strong rhetoric from Warren's camp, they failed to prevent many Democratic colleagues from supporting the bill, with supporters believing it can at least begin to regulate this critical area.
Despite ongoing controversies, U.S. President Trump has stated that he hopes to present a stablecoin bill before August. Notably, Howard Lutnick, the Secretary of Commerce and an ally of Tether in the Trump administration (former CEO of Cantor Fitzgerald), may influence the direction of the legislation. Last week, Trump's advisors expressed support for the GENIUS bill, increasing its chances of being passed before the August deadline.
Chainlink data shows that the on-chain stablecoin market has surpassed 250 billion USD, making it one of the most widely used and thoroughly validated on-chain use cases. If the GENIUS Act is ultimately implemented, compliant stablecoin issuers (such as Circle's USDC) could become the biggest beneficiaries, while traditional bank-backed stablecoins and regulated foreign issuers (such as Japanese or Swiss companies) will also gain opportunities for market expansion. As the legislative process advances, the global stablecoin market landscape may face a reshuffle.
View Original
The content is for reference only, not a solicitation or offer. No investment, tax, or legal advice provided. See Disclaimer for more risks disclosure.
The U.S. Senate passes the GENIUS bill, is Tether's stablecoin dominance in "danger"?
Written by: BitpushNews
On June 17th in the afternoon Eastern Time, the U.S. Senate passed the "GENIUS Stablecoin Act" (Guiding and Establishing National Innovation for U.S. Stablecoins Act) with bipartisan support. This marks the first time the Senate has passed significant legislation targeting the cryptocurrency industry, which will next be submitted for consideration by the House of Representatives. If it passes without amendments, it will soon be presented to President Trump for signing into law.
This legislation not only mandates transparency but also introduces stricter regulations for the operation of stablecoins, placing them under the close supervision of the U.S. government. This article will analyze the key points of the "GENIUS Act," its impact on the current stablecoin giant Tether, and the development space it opens up for compliant competitors.
Core Interpretation of the Bill
GENIUS is a comprehensive regulatory framework for stablecoins proposed by Tennessee Senator Bill Hagerty. The bill will regulate payment stablecoins (i.e., digital assets that are pegged to a fiat currency unit such as the US dollar, with issuers committing to redeem them at a fixed value).
According to the legislation, only "approved stablecoin issuers" (subsidiaries of insured banks or qualified issuing institutions) and specific "foreign payment stablecoin issuers" (registered in countries recognized by the U.S. regulatory framework) can operate in the U.S. It is worth noting that the legislation prohibits payment stablecoins from paying interest to holders (some views argue that paying interest could make them securities) and does not apply to fiat currency, bank deposits, or securitized assets.
All stablecoin issuers must hold the following reserve assets at a ratio no lower than 1:1: US dollar cash, Federal Reserve deposits, bank demand deposits, Treasury bonds maturing within 93 days, or overnight reverse repurchase agreements.
In addition, issuers must not misappropriate reserves and are required to publish reserve proof audited by a registered accounting firm every month, while also complying with the Bank Secrecy Act.
Due to the backing of high-quality assets, the probability of loss is much lower than that of bank deposits. Payment stablecoins are not included in the FDIC insurance scope, and the bill strictly prohibits issuers from making misleading claims. It is worth noting that GENIUS allows individuals to self-custody stablecoins, and it does not involve legitimate transfers between individuals without intermediaries or transactions between domestic and foreign accounts of the same entity.
The bill restricts the rights of tech giants to issue stablecoins, such as Meta (formerly Facebook), Amazon, and other listed companies, unless they meet financial risk and data privacy standards.
The impact on Tether
Currently, the world's largest stablecoin issuer, Tether (USDT), may be the company most severely impacted. As it stands, Tether is almost certainly unable to fully meet the requirements in GENIUS.
According to its latest quarterly reserve report (2025Q1), USDT is only about 85% backed by cash and cash equivalents, failing to meet the 100% requirement of the GENIUS Act. Furthermore, its auditing firm BDO Italia does not meet the standards of the Public Company Accounting Oversight Board (PCAOB), further exacerbating compliance hurdles.
For a long time, Tether has been the focus of debates on stablecoin transparency and security. Despite claims of being fully backed by reserves, Tether has faced scrutiny over the lack of transparency regarding the composition of its collateral. The company has been under investigation by U.S. regulators, and the legitimacy of its reserve backing has also been called into question.
Tether CEO Paolo Ardoino recently hinted that the company may not allow the market-leading USDT to enter the United States directly, but is considering launching a fully regulated domestic settlement stablecoin branch.
According to previous reports by BitPush, Tether has recently moved its headquarters to the crypto haven of El Salvador, and this one of the world's most profitable companies may continue to focus on emerging markets with limited impact from the "GENIUS Act."
Richard Rosenthal, the head of Deloitte's digital asset regulatory business, believes that foreign issuers face two unknown obstacles regarding this bill: 1) what activities and conditions the final law will allow foreign issuers to conduct with U.S. customers; and 2) how the relevant regulatory discretion will be exercised to allow or restrict entry into the U.S. market. This is a politically sensitive area, and the outcome remains to be seen.
Can the House of Representatives pass it?
Despite the substantial progress made with the Senate's passage of the GENIUS Act, the next challenge lies with the House of Representatives. The House Financial Services Committee has already advanced its own stablecoin legislation—the Stablecoin Transparency and Better Ledger Economic Accountability Act. However, it has yet to be submitted for a full House vote, and lawmakers may choose to support the GENIUS Act over their own version.
The broader discussion around stablecoin and cryptocurrency regulation is becoming increasingly politicized, especially with the Trump family's involvement in the crypto space, and the deepening relationship with crypto companies (such as World Liberty Financial and its stablecoin) has sparked discussions about potential conflicts of interest.
In addition, critics point out that the bill still has significant loopholes that allow unregulated foreign stablecoins to circulate in the U.S. through decentralized platforms.
The main opponent of the bill, senior Democratic senator Elizabeth Warren of the Senate Banking Committee pointed out:
"The Trump administration could sign a reciprocal agreement with the Bukele regime in El Salvador where Tether is located, allowing Tether to fully enter the U.S. market while circumventing the requirements of the bill... If Congress does not amend the GENIUS Act, billionaires like Elon Musk and Jeff Bezos will be able to issue stablecoins that track user spending data and squeeze out competitors. When this bubble eventually bursts, they will inevitably come back to beg taxpayers to foot the bill."
Despite the strong rhetoric from Warren's camp, they failed to prevent many Democratic colleagues from supporting the bill, with supporters believing it can at least begin to regulate this critical area.
Despite ongoing controversies, U.S. President Trump has stated that he hopes to present a stablecoin bill before August. Notably, Howard Lutnick, the Secretary of Commerce and an ally of Tether in the Trump administration (former CEO of Cantor Fitzgerald), may influence the direction of the legislation. Last week, Trump's advisors expressed support for the GENIUS bill, increasing its chances of being passed before the August deadline.
Chainlink data shows that the on-chain stablecoin market has surpassed 250 billion USD, making it one of the most widely used and thoroughly validated on-chain use cases. If the GENIUS Act is ultimately implemented, compliant stablecoin issuers (such as Circle's USDC) could become the biggest beneficiaries, while traditional bank-backed stablecoins and regulated foreign issuers (such as Japanese or Swiss companies) will also gain opportunities for market expansion. As the legislative process advances, the global stablecoin market landscape may face a reshuffle.