Tether’s USDT faces compliance clock as GENIUS Act marks first year
A year after Trump signed the GENIUS Act, lawyers question whether foreign issuers like Tether share domestic firms' three-year grace period.
One year after President Donald Trump signed the GENIUS Act into law, the United States’ first comprehensive stablecoin statute, Tether’s path to full compliance remains unresolved, according to a CoinDesk report. The uncertainty centres on whether foreign-domiciled issuers such as Tether receive the same three-year transition window granted to domestic firms, or face earlier obligations that could affect USDT’s standing on American exchanges.
The GENIUS Act, signed on 18 July 2025, set a general compliance runway extending to July 2028. But legal specialists say key provisions may bite far sooner for issuers based outside the United States, creating a narrower and less certain timeline than the headline three-year figure suggests.
Freeze-and-seize powers arrive first
Justin Levine, a lawyer at Davis Polk who advises clients on stablecoin regulation, told CoinDesk that foreign issuers will need to comply immediately with provisions granting US authorities the power to freeze and seize tokens tied to illicit activity, once the law takes effect, likely around January. Levine indicated that separate requirements governing continued listing on US exchanges would probably carry a longer implementation runway, distinguishing enforcement powers from broader market-access rules.
That distinction matters for Tether, which remains the largest stablecoin issuer by market value and has not publicly outlined how USDT will satisfy the law’s foreign-issuer requirements. CoinDesk reported that Tether did not respond to multiple requests for an updated position ahead of publication, leaving a gap in the record just as the compliance clock starts to matter to exchanges and institutional counterparties operating in the US market.
Circle’s head start versus Tether’s silence
US-based rival Circle has already moved to align its operations with the incoming framework, a contrast that regulators and exchanges are likely to weigh as they assess listing risk across the stablecoin sector. Tether’s public position has, so far, rested largely on remarks made by chief executive Paolo Ardoino at the time the bill was signed.
Speaking to CoinDesk after the White House signing, Ardoino said: “Tether will comply with the GENIUS Act.” He added that the company intended to launch a separate US-focused token while ensuring USDT itself met the law’s requirements for foreign issuers — a dual-track strategy that has since materialised in the form of USAT, Tether’s dollar-denominated product built for the domestic market.
Expansion continues as rules are finalised
Despite the unresolved compliance question, Tether has continued to expand its footprint, pressing ahead with USAT development, enterprise payments infrastructure and investments across Latin America while US regulators work through the detailed rulemaking required to implement the GENIUS Act in full. That rulemaking gap is itself notable: without finalised guidance, exchanges, issuers and their lawyers are left interpreting statutory language rather than settled regulatory text.
For UK and European institutions with exposure to USDT liquidity, the outcome carries direct relevance. A stricter reading of the foreign-issuer provisions could tighten the terms under which USDT trades on US-linked venues, with knock-on effects for global dollar-stablecoin liquidity that underpins much of the broader crypto trading ecosystem, including markets accessed from London and the eurozone.
Read more: US regulators miss GENIUS Act deadline, leaving stablecoin rulebook incomplete
