Tether's USDT hits 2-year countdown threatening its position on U.S. crypto platforms

The GENIUS Act, a U.S. law enacted to regulate stablecoin issuers, reached its first anniversary on July 18, 2026, marking a significant milestone with important implications for the stablecoin market. Tether, the issuer of the world's most widely circulated stablecoin USDT, faces increasing pressure to comply with the act's requirements within the next two years. The law established a three-year grace period for compliance, meaning by 2028, stablecoins must meet new regulatory standards to remain accessible on U.S. crypto trading platforms. However, there remains some uncertainty, particularly concerning foreign issuers like Tether, as differing interpretations exist about whether they must comply immediately upon the law's effect or can also use the grace period.

Tether's CEO Paolo Ardoino had assured compliance last year, but recent disclosures indicate that up to 25% of USDT reserves are held in assets such as precious metals, lending, and Bitcoin, which do not meet GENIUS requirements. The act mandates stablecoin reserves be held in the most liquid assets—essentially cash and U.S. Treasuries. While Tether introduced a U.S.-compliant stablecoin called USAT issued through Anchorage Digital, it currently has relatively low usage compared to USDT.

Regulatory rulemaking to implement GENIUS remains incomplete, as federal agencies missed the deadline to finalize detailed regulations within the first year. This regulatory uncertainty has left issuers and exchanges in a wait-and-see position, with some market participants expecting smaller platforms to preemptively delist non-compliant stablecoins, while others on larger platforms may continue to support them until forced to comply. Legal experts note the significant challenge ahead, especially regarding requirements like registration with the Office of the Comptroller of the Currency and maintaining appropriate reserves.

The compliance timeline and regulatory framework could reshape the stablecoin landscape in the U.S., potentially favoring issuers like Circle, which appears to be more proactively aligning with forthcoming regulations. Meanwhile, Tether's position depends heavily on its ability to meet the GENIUS Act's rules or risk losing access to U.S. markets in the near future. The crypto industry’s broader regulatory efforts, including the pending Digital Asset Market Clarity Act, may further influence how stablecoins are governed and the market dynamics in the years ahead.