Tether, based in Bitcoin-friendly El Salvador, could struggle to comply with the GENIUS Act, as it backs its USDT stablecoin with assets such as Bitcoin, potentially requiring the liquidation of Bitcoin reserves to meet regulatory requirements.

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This could provide an edge over foreign-based issuers, such as Tether (USDT), the world’s largest stablecoin issuer by market cap, which some argue may struggle to adjust. Tether, currently based in Bitcoin-friendly El Salvador, has no formal U.S. presence and has traditionally backed its USDT stablecoin with a mix of assets, including Bitcoin, U.S. Treasury bills, and corporate paper. Much of Tether’s reserves, particularly its Bitcoin holdings, may not meet the new compliance standards, according to a recent report from JP Morgan.

Sources

Senate Banking Committee to Vote on Bipartisan 'Genius' Stablecoin Bill This Week