One year after President Donald Trump signed the GENIUS Act into law, federal regulators have failed to finalize implementation rules, leaving Tether with a two-year countdown to comply or face removal from U.S. crypto platforms.
The GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins) became law in July 2025 with a three-year grace period for stablecoin compliance. That grace period expires in July 2028, when non-compliant foreign stablecoins will be delisted from U.S. centralized trading platforms. Tether, the El Salvador-based issuer of USDT, must restructure approximately 25% of its reserves currently held in non-compliant assets including precious metals, lending, and bitcoin holdings.
“Tether will comply with the GENIUS Act,” said Paolo Ardoino, CEO of Tether, in a statement affirming the company’s commitment to meet the deadline.
The law requires stablecoin issuers to hold reserves exclusively in highly liquid and reliable assets, primarily cash and U.S. Treasuries. Tether launched USAT in 2026 as a U.S.-compliant alternative through banking partner Anchorage Digital, a crypto-native bank. Circle, a U.S.-based rival issuer, has moved more aggressively to align with regulatory expectations ahead of the deadline.
Regulatory Uncertainty Persists
Federal regulators missed their one-year deadline to publish final implementation rules, creating ambiguity about how GENIUS will be enforced. Legal experts disagree sharply on whether foreign issuers must comply immediately when the law becomes effective in January 2027 or whether they retain the full two-year runway until July 2028.
Justin Levine, a lawyer at Davis Polk, interprets the law as granting foreign issuers a two-stage timeline. “Upon the effectiveness of the GENIUS Act, foreign issuers will need to immediately comply with lawful orders to seize and freeze coins held by illicit actors, but they will have a runway of approximately two more years to prepare for the additional requirements so that their coins may remain eligible for listing on U.S. centralized trading platforms,” Levine said.
Kevin Wysocki, head of policy at Anchorage Digital, suggested that market participants may not wait for the formal deadline. “Non-compliant stablecoins cannot be used by U.S. institutions when the safe harbor expires in 2028, but we don’t expect the market to wait,” Wysocki said.
The Office of the Comptroller of the Currency (OCC) has issued footnotes suggesting a two-track deadline system for foreign and domestic issuers, though the specific requirements remain unclear. Paul Hastings law firm initially published analysis distinguishing foreign and domestic compliance timelines but removed the interpretation from its website without explanation.
Exchange Compliance Uncertain
Trevor Tanifum, managing principal at FS Vector, offered a candid assessment of how U.S. exchanges may approach the deadline. “We’re going to spend the money on lawyers and lobbyists until someone walks up to our door and forces us to delist these non-U.S. issuers,” Tanifum said.
Coinbase, the largest U.S. crypto exchange, declined to discuss its position on USDT listing under GENIUS compliance requirements.
Full compliance for foreign stablecoin issuers requires OCC registration, Treasury certification that the issuer’s home regulator meets U.S. standards, and reserve holdings held in U.S. financial institutions. The Digital Asset Market Clarity Act, a companion bill intended to clarify GENIUS implementation, remains pending in Congress.
