Tether has 2 years to comply with the USDT GENIUS Act

Tether has until July 18, 2028, to bring USDT into compliance with the GENIUS Act, and this directly affects traders who hold the market’s largest stablecoin. The law was signed on July 18, 2025, and the transition period gave issuers another 2 years to adapt.

This was reported by a major exchange. The GENIUS Act sets the framework for issuing and circulating stablecoins, requiring registration, 1:1 reserves in liquid assets, monthly disclosure of reserve composition, audits, CEO/CFO certification, and compliance with AML/KYC and sanctions rules. For major players, this is no small matter. These are new rules of the game.

Why does this law hit USDT specifically?

The problem with Tether is that the company is not registered in the U.S., its headquarters are located in El Salvador, and its reserves, according to its website, include not only dollars and short-term government bonds, but also precious metals and Bitcoin. For the U.S. regulatory regime, that is not an ideal picture. a major exchange explicitly notes that under such conditions the company cannot offer USDT in full compliance with the new rules.

And there is another important point: the stablecoin market is huge right now. According to DefiLlama, its market capitalization stands at $309,998 billion, of which USDT accounts for $184,062 billion, or 59.38% dominance. USDC has $73,374 billion, while USD1, which is also mentioned in the material, has only $4.27 billion. In other words, any regulatory blow to USDT will be felt across the entire market. That is why this story matters not only for Tether, but for everyone who moves liquidity between exchanges and wallets every day. That is why it is worth following now, rather than waiting for the deadline.

What has Tether already done, and what has it not?

The company launched a separate stablecoin, USAT, aimed at the U.S. market. But it is still far behind its competitors. According to DefiLlama, USAT’s market capitalization is only about $185.33 million, almost 1,000 times less than USDT. That is a small base for a product that was supposed to become a backup option in case of stronger pressure.

Tether itself seems to understand that time is short. In Q1 2026, the company reported $191.77 billion in assets, $183.54 billion in liabilities, and $8.23 billion in excess reserves. It also reported about $141 billion in exposure to U.S. Treasury bills, $20 billion in physical gold, and $7 billion in Bitcoin. This is no longer just a stablecoin issuer, but a major financial player with a very complex balance sheet structure. That is why regulatory pressure here is so sensitive.

“The GENIUS Act requires not only 1:1 reserves, but also regular disclosure, audits, and readiness to freeze funds upon lawful requests,” the description of the law’s provisions cited by a major exchange says.

Market reaction

The market does not yet see panic, but the numbers speak for themselves. USDT controls 59.38% of the stablecoin segment, which means that any change in the rules for Tether immediately hits liquidity in the spot market, in DeFi, and in over-the-counter deals. By comparison, USDC with $73.374 billion looks much better prepared for the U.S. regulatory framework, while USD1 has not yet gained scale.

There is also a historical backdrop. In 2021, the CFTC fined Tether $41 million and said that in a 26-month sample, sufficient fiat reserves were present on only 27.6% of days. That same year, the NYAG reached a $18.5 million settlement with Bitfinex/Tether and imposed a ban on doing business with New Yorkers. This does not mean the current situation repeats the old claims exactly. But trust in an issuer in such cases is always measured over a long time. And very expensively.

• The GENIUS Act was signed on July 18, 2025.

• Tether has until July 18, 2028, to adapt USDT.

• The stablecoin market is valued at $309,998 billion.

• USDT accounts for $184,062 billion and 59.38% of the market.

• USAT has a market capitalization of about $185.33 million.

• Tether had $8.23 billion in excess reserves in Q1 2026.

What does this mean for investors?

For short-term traders, the main risk is simple: if the U.S. starts strictly enforcing the GENIUS Act before the transition period expires, part of the infrastructure around USDT may become less convenient or more expensive. This is especially important for those who keep liquidity in stablecoins between trades, rather than simply storing capital.

For long-term holders, the picture is different. If Tether does adapt USDT to the new requirements, that could remove some of the old questions about reserves and reporting. If not, USDT risks gradually losing share where U.S. regulatory compatibility is specifically required. In Europe, we have already seen a similar logic: after MiCA launched, some platforms restricted certain stablecoins for retail clients, while support remained for those that comply with the new rules. For Ukrainian users, the practical takeaway is to watch not only the price, but also where exactly this asset is accepted without restrictions.

Against this backdrop, it is more convenient to have a plan in advance. If you need to quickly sell USDT TRC20 to Monobank, it is better not to wait until regulatory news has already hit liquidity.

Frequently asked questions

When does USDT have to comply with the GENIUS Act?

According to a major exchange, Tether has until July 18, 2028. The law itself was signed on July 18, 2025, and the transition period is set at 2 years. But separate requirements for foreign companies may take effect earlier if regulators decide so in the final rules.

Why can’t Tether just leave everything as it is?

Because the GENIUS Act requires registration, 1:1 reserves in liquid assets, monthly reporting, audits, and compliance with AML/KYC and sanctions rules. Tether has gold and Bitcoin in its reserves, and the company’s headquarters are not in the U.S. For the American regulatory regime, that is more complicated than for issuers that already operate under licensed banking supervision.

Can USAT replace USDT in the U.S. market?

Not yet. According to DefiLlama, USAT has a market capitalization of about $185.33 million, while USDT stands at $184,062 billion. The nearly 1,000-fold difference shows that Tether’s backup product is still far from the scale of its main stablecoin.

What should those who work with USDT every day do?

The situation is simple and a bit harsh: Tether has 2 years to prove that USDT can live under the new rules. If that does not happen, the market will start reallocating liquidity differently on its own. And those who work with USDT every day should already have a backup scenario and know where they can quickly sell USDT TRC20 to Monobank.

This material is not financial advice. Cryptocurrency trading involves significant risks. Part of this text was prepared with the help of artificial intelligence based on public sources and reviewed by our editorial team.