Tether's GENIUS Act Advantage: A Costly Compromise for US Stablecoin Issuers

The GENIUS Act, signed into law in July 2025 by President Donald Trump, established a federal framework for stablecoins in the United States. The legislation included provisions that allowed foreign issuers to remain outside direct U.S. supervision if their home regulatory system was deemed comparable to the American framework.

Tether, a leading stablecoin issuer, was among those who benefited from this provision. According to sources close to the negotiations, Tether wanted more time before non-compliant stablecoins could no longer be offered through U.S. trading platforms. The three-year grace period allowed by the GENIUS Act gave Tether additional flexibility.

However, critics argue that this provision and others in the law give foreign issuers a cost advantage over their U.S. counterparts. Timothy Massad, a former Treasury and Commodity Futures Trading Commission official, said weaker controls could allow foreign issuers to avoid compliance costs faced by American companies.