According to Analysts, the GENIUS Act Could Accommodate Tether with Slight Conditions

The U.S. Senate Banking Committee has advanced the bill for debate and a vote.

The U.S. stablecoin bill, the GENIUS Act, is seen as beneficial for Tether’s USDT in its current form, according to policy watchers evaluating the package.

Alex Thorn, Head of Research at Galaxy Digital, noted that Tether now has the flexibility to register in the U.S. or operate offshore without dire consequences. He remarked:

> “In its current form, the GENIUS Act is great for Tether. The door is open for them to register onshore, but if they don’t, they are only prohibited from: USDT being used for interbank settlement and marketing USDT onshore as a ‘stablecoin.’”

What’s Next for Tether?

Thorn mentioned that Tether already complies with many provisions and could operate smoothly within the U.S.

> “If they don’t register, though, they can still exist and be traded onshore provided they comply with OFAC/FinCEN BSA orders (and they do already comply today).”

He added that additional restrictions might compel the firm to establish a U.S.-based subsidiary if it fails to meet specific requirements.

> “I think they either register and meet collateral requirements, or they spin up a subsidiary with an alternate version of USDT that meets all requirements and use that one in the U.S.”

Finance lawyer Scott Johnsson echoed Thorn’s sentiment, suggesting that offshore stablecoin issuers like Tether would increase demand for U.S. treasury bills (debt).

> “Generally thinks it strikes a good balance between allowing offshore issuers to continue growing (soaking up Tbills) while keeping them on a level playing field with onshore issuers within the U.S.”

Tether’s CEO Paolo Ardoino, in a recent Bloomberg interview, reiterated this position:

> “USDT is representing the last stronghold in support for the U.S. dollar in emerging markets when everywhere else there’s de-dollarization push from BRICS nations.”

If the bill accommodates Tether, it could be a significant relief, especially after a harsh JPMorgan report suggested that the issuer could face a ban in the U.S. under new stablecoin legislation.

The GENIUS Act was marked up and advanced for a vote in the Senate by the Banking Committee on March 13. Tim Scott, Chairman of the Senate Banking Committee, commented:

> “This (GENIUS Act) is about keeping innovation and opportunity on American soil rather than driving it overseas.”

In the meantime, USDT’s market size hit a record high of $143 billion amid growing interest in stablecoins and the European Union’s delisting.