GENIUS Act vs Tether: Drama, Deadlines & the Battle for Crypto’s Crown 👑

When the GENIUS Act is finally signed—if, indeed, Congress finds the time between quarreling and pretending to govern—stablecoin issuers like Tether will find themselves standing at the crossroads of destiny, given 18 to 36 months to clean up their accounts or flee these United States like so many anxious serfs. And there, in the flickering candlelight of global finance, stands Tether—the solitary giant with a very large bag of USDT and quite a few skeletons in its closet—forced to contemplate, with the seriousness reserved for balding czars before a revolution, its next move. 🧐

Renowned—if not exactly celebrated—for its Houdini-like abilities to escape transparency, Tether faces three, and only three, choices: obey the harsh new law (how novel!), retreat from the US market entirely (oh, to be misunderstood in foreign lands!), or conjure up an all-American, apple-pie-flavored stablecoin so compliant, it makes accountants weep with joy. Alas, none of these choices involve just ignoring the law—which, for Tether, is a real shame. 😏

A New Era for Stablecoins (Or, Regulatory Armpits)

With the GENIUS Act, America, long the land of entrepreneurial chaos, attempts to bridge the brash world of cryptocurrency and the staid old halls of traditional finance—providing, of course, “essential regulatory safeguards.” Stablecoins, the least volatile of all digital coins—something like being the most reliable character in “War and Peace” (good luck)—now find themselves the subject of serious, bureaucratic affection.

While crypto enthusiasts pop open bottles at this bureaucratic embrace, chanting victory over the luddite masses, Tether may well find that this love spells its undoing. With over 60% of global stablecoin supply, USDT is the elephant in the room—a creature now being asked to dance the waltz of transparency, and badly offbeat.

GENIUS or CONTROL?

The new Bitcoin-focused GENIUS Act just dropped—and regulators are twirling their mustaches. Clearer rules? Yes. Tighter control? Oh, absolutely.

Foreign stablecoins like Tether, beware: comply or get out, leaving domestic issuers to feast on your market share.
— Coin Bureau (@coinbureau) June 18, 2025

The bill has already pirouetted through the Senate and now waltzes in the House of Representatives, where its fate and the exact length of Tether’s suffering—18 months if the House prevails, three years if the Senate wins—will soon be decided.

Tether’s Dance with Transparency (Or, How Not To Publish Audits)

Before Washington decided to play schoolmaster to the crypto world, Tether was already an object lesson in dodging transparency: regular audits were as frequent as Siberian sunshine. When annoyed authorities finally intervened, Tether’s lack of transparency turned from an open secret into legal fireworks worthy of an imperial drama.

2021 saw Tether performing legal penance in New York—paying $18.5 million for sins against accounting, and being exiled from operating in the Empire State. There was a lost $850 million (no small change—though who’s counting?), mysterious loans from Tether’s reserves, and lots of angry letters with legal letterhead.

Since then, Tether has learned the fine art of “quarterly attestations”—essentially saying “we’re fine, trust us!” every few months. Unfortunately, the GENIUS Act requires something more convincing, like actual audits and less creative fiction.

The new laws also don’t appreciate Tether’s fondness for risky financial acrobatics. What is bookkeeping, if not a circus?

Curbing Illicit Use (Espionage, Drama, and Secret Agents 🕵️)

In this grand ballet, stablecoins are not just financial nerds but occasionally star as the villain: facilitating sanctions evasion and five-star international intrigue. Tether, as the issuer of the planet’s favorite digital dollar, found itself starring in blockbusters featuring Russian and North Korean adversaries pirouetting around American sanctions.

These days Tether declares it’s a friend to law enforcement: freezing wallets, cooperating with the US Secret Service, and occasionally starring in news releases that could have been written by Sherlock Holmes’ PR agent. See, for example, the $23 million freeze that made headlines in March—great for the résumé, less so for its old clientele. 🧊

Tether Recognized for Assisting the United States Secret Service in $23m Freeze Related to Transfers on Sanctioned Exchange, Garantex
Learn more:

— Tether (@Tether_to) March 7, 2025

The GENIUS Act, unmoved by Tether’s new leaf, states quite clearly: everyone must be ready to freeze and seize illicit coins at a moment’s notice, implement anti-money laundering measures, and run Know Your Customer drills until even your childhood imaginary friend is fully documented.

So, does Tether comply, bail, or roll out the stars-and-stripes stablecoin? Decisions, decisions…

Can Mighty USDT Survive Without the Mighty US?

Currently, Tether towers over rivals with nearly 158 billion USDT, dwarfing Circle’s measly 62 billion supply—a margin so commanding that Napoleon would blush. Yet, the US, while home to powerful institutions and endless Senate hearings, is not Tether’s main breadbasket. Asia, Latin America, and other thirsty markets are where the real action is. 🌎

The bulk of Tether’s trading actually happens far from American soil, mostly on platforms outside the US, like Binance—the digital Wild West. Thus, should Tether withdraw from the US, don’t cry for it just yet—the music plays on elsewhere.

As is customary, BeInCrypto requested comment from Tether, which naturally replied with thunderous silence—surely because they were too busy planning reckless new adventures.

If you want historical precedent: when Europe’s MiCA regulation came into force, Tether didn’t bother with the Brussels sprout version of compliance, but simply withdrew—because nothing says “commitment to transparency” quite like running away.

That said, while the US is only part of Tether’s empire, it’s the golden goose of finance, innovation, and reputation. Being exiled is never good for business—just ask any disgraced czar.

The Perils of Pulling Out (No, Not That Kind 😉)

If Tether were to withdraw, it would slam the door on millions of users, spook institutional investors, and send signals to the market that are only slightly less reassuring than an unexplained cough in a Tolstoy novel. The company’s legend would take a hit—admitting, in effect, that it can’t face the bright light of legitimate regulatory scrutiny.

Enter Circle’s USDC: a compliant knight in shining armor, ready to scoop up users. But, much like Pierre in a duel, compliance alone doesn’t close the gap on Tether’s overwhelming lead. Still, one can imagine Tether’s competitors circling (pun intended) with the eager energy of relatives at a rich uncle’s deathbed.

Tether’s dominance could even inspire American lawmakers to “adjust” the law—after all, money talks, and in Washington, it composes entire symphonies.

Is Compromise on the Table? (Spoiler: Of Course)

The GENIUS Act, as outlined by the wise elders of the Senate, must be merged with the House’s STABLE Act. In this grand legislative tea party, everything is up for negotiation—from the length of Tether’s probation to whether public entities may swing their own stablecoins.

Anonymous insiders suggest the US government and Tether are stuck with each other the way Russia is stuck with winter—mutually dependent, but quietly wishing for change. Tether’s vast appetite for US Treasury bills supports the dollar, which is handy when faith in the dollar is often shakier than a Moscow bridge at thaw. Demand for stablecoins may soar post-GENIUS Act, making everyone a little more motivated to play nice.

“There’s kind of been a mutual recognition from the US government and Tether that they’re a bit stuck with each other… The demand [Tether has] for treasuries is larger than Germany. It’s such a significant volume that it would not be in the US’s best interest to force them to divest all that by some overly stringent regulation. They need to meet somewhere that’s workable and profitable on both sides of that relationship,” the source told BeInCrypto.

However, there lurks a secret third way—one that Tether’s leadership has not-so-secretly hinted at in public (where else?):

The Birth of the American Tether (All Hail, Compliance Edition 🇺🇸)

CEO Paolo Ardoino, with the weariness of a man who’s considered every loophole, has pledged a shiny, compliant, US-only stablecoin—one obedient enough for regulators to display on their mantels. This new creation would serve the US market with the sincerity of a government functionary and all the innovation of a Tolstoy family reunion.

Yet, even Tether knows this isn’t ideal: running two stablecoins requires twice the effort, twice the compliance paperwork, and twice as many attempts to explain to your aunt what cryptocurrency actually is.

“Functionally, they probably would prefer not to have to do that. It just creates more overhead and introduces inefficiencies administratively and compliance-wise. It’s not the ideal situation for them to have to kind of firewall US users versus track what’s going in and out of the geolocations,” the same source said on the topic.

In sum, Tether faces a moment as dramatic as any Petersburg ballroom: comply and remain, depart and diminish, or bifurcate with the elegance of a czar splitting his empire (and, inevitably, his headaches).

With the GENIUS Act looming, and the fate of USDT hanging in the balance, one cannot help but watch with morbid curiosity—and popcorn—like a Tolstoy character hoping to make it to the next chapter. Such is the comedy and tragedy of commerce!

2025-07-05 02:20