The GENIUS Act poses regulatory threat to Tether, benefitting Circle

From Yahoo Finance: 2025-06-26 13:40:00

The GENIUS Act, a bill regulating stablecoins, poses a threat to Tether, the largest stablecoin issuer with a $156 billion circulation. It requires issuers to back tokens with cash and short-term Treasury securities, comply with U.S. financial regulations, and undergo annual audits, potentially impacting Tether’s reserve practices.

Tether’s lack of financial transparency could become a regulatory issue due to the GENIUS Act’s stringent requirements. CEO Paolo Ardoino hinted at creating a new U.S.-compliant token or focusing on Asia and Latin America. Circle, issuer of the USDC stablecoin, stands to benefit from Tether’s potential regulatory challenges.

After the bipartisan passage of the GENIUS Act, Circle’s stock price surged 34%, showing investor confidence in regulatory alignment. Circle’s market cap is less than half that of Tether, but it could gain market share from Tether’s regulatory issues. Tether’s move to El Salvador may still grant access to the U.S. market if regulatory equivalency is confirmed.

TheStreet’s Roundtable has reached out to Tether for comment on the potential regulatory impact but has not received a response. Updates will be provided if Tether responds to the regulatory concerns raised by the GENIUS Act. Stay informed on the latest developments in the stablecoin market and regulatory landscape.

Read more: Wall Street’s GENIUS Act could spell trouble for the largest stablecoin issuer