- 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, GENIUS Act, is great for Tether’s USDT in its current form. This, according to policy watchers who have evaluated the package so far.
In fact, according to Alex Thorn, Head of Research at Galaxy Digital, Tether now has the flexibility to register in the United States or operate offshore without dire consequences. He said,
“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 added that Tether already complies with most of the provisions and could smoothly operate 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).”
However, the exec believes that additional restrictions might force the firm to form a U.S-based subsidiary if it doesn’t meet certain 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 US.”
For his part, finance lawyer Scott Johnsson echoed Thorn’s sentiment, adding that offshore stablecoin issuers like Tether would boost demand for the 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 US.”
The same position was reiterated by Tether’s CEO Paolo Ardoino in a recent Bloomberg interview. He stated,
“USDT is representing the last stronghold in support for the US dollar in the emerging markets when everywhere else there’s de-dollarization push from BRICS nations.”
If the bill accommodates Tether, it could be a huge relief. Especially after a damning JPMorgan report implied the issuer could be banned from the United States under the new stablecoin bills.
The GENIUS Act was marked up and advanced for a vote in the Senate by the Banking Committee on 13 March. Commenting on the update, Tim Scott, Chairman of the Senate Banking Committee, said,
“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.
