preferred on
Points of Focus
- USDT’s Bitcoin and gold reserves fall outside permitted US assets.
- Tether’s excess reserve cushion fell from $8.23B to $4.11B.
- Foreign stablecoin issuers face tougher registration and reserve rules by 2028.
Tether is approaching a new US regulatory test as federal agencies turn the GENIUS Act from legislation into detailed rules covering stablecoin reserves, audits, anti-money laundering controls and foreign issuers.
The rules could have particular consequences for USDT. Tether operates from El Salvador, while its flagship dollar token remains the world’s largest stablecoin, with roughly $184 billion in circulation. Under the GENIUS Act, foreign stablecoins can continue reaching US customers only if their issuers satisfy a separate set of conditions, including registration and regulatory comparability requirements.
Tether has already created a second route into America through USA₮, its US-focused stablecoin issued by Anchorage Digital Bank. But USA₮ does not automatically solve the regulatory question surrounding USDT itself.
.@POTUS and Congress delivered the GENIUS Act, establishing a landmark framework and clear rules of the road for payment stablecoins, and Treasury is moving quickly to implement that framework. @USTreasury welcomes input from stakeholders as we work to provide the regulatory…
— Treasury Secretary Scott Bessent (@SecScottBessent) August 17, 2026
Treasury rules put USDT’s reserve structure under the microscope
The GENIUS Act was signed into law in July 2025 and requires permitted stablecoins to maintain at least 1:1 reserves using a defined list of assets. Those include cash, demand deposits, short-dated US Treasuries, qualifying repurchase agreements and money-market funds holding eligible assets.
That list does not include Bitcoin or gold.
Tether’s reserves contain both. At the end of March, USDT reserves included about $19.8 billion of gold, equal to roughly 10% of reserves, alongside approximately $7 billion of Bitcoin and $117 billion of Treasury bills, according to its quarterly disclosures reported by Reuters. Tether added another 14 metric tons of gold during the second quarter, taking the gold backing its products to more than 146 tons.
USDT would therefore not map neatly onto the reserve structure required of a US permitted issuer in its current form. For a foreign issuer, the law requires the Treasury to determine that its home regulatory regime is comparable with the US framework, specifically including the GENIUS Act’s reserve requirements. The issuer must also register with the Office of the Comptroller of the Currency and maintain sufficient reserves at a US financial institution to meet US customer liquidity needs.
The deadline is not immediate. Beginning three years after July 18, 2025, US digital-asset service providers generally cannot offer a payment stablecoin to US customers unless its issuer qualifies under the new regime or a foreign-issuer exception. That puts July 2028 on the calendar for offshore issuers seeking continued US distribution.
Tether’s $4.1 billion cushion has halved since March
The reserve debate arrives after Tether’s excess asset buffer fell sharply during the second quarter.
On March 31, Tether reported $191.77 billion in assets against $183.54 billion in liabilities, leaving a record $8.23 billion surplus. By the end of June, assets stood near $187.75 billion against $183.64 billion of liabilities, reducing excess reserves to about $4.11 billion. The cushion therefore fell by roughly half in one quarter even as Tether generated about $1.5 billion in operating profit.
The company remains overcollateralized based on those figures, but reserve composition is becoming more important as Washington writes rules defining which assets can back regulated payment stablecoins.
Tether has also taken a long-awaited step on financial reporting. On Aug. 14, the company said KPMG US had completed a full independent audit of its 2025 financial statements, its first such audit after years of relying on reserve attestations. The audited financial statements themselves, however, were not publicly released.
The history behind that issue is significant. In 2021, the CFTC fined Tether $41 million over claims about USDT’s reserves, finding that sufficient fiat reserves were held for only 27.6% of the days examined between 2016 and 2018.
GENIUS implementation is moving into reporting and enforcement
Federal agencies are now filling in the operational details.
The OCC’s proposed GENIUS Act rules cover reserve assets, redemption, risk management, audits, supervision and foreign stablecoin issuers. In June, the regulator separately proposed weekly and quarterly reporting requirements for permitted and registered foreign issuers.
Treasury’s FinCEN and OFAC have also proposed rules treating permitted stablecoin issuers as financial institutions under the Bank Secrecy Act and requiring formal anti-money laundering and sanctions compliance programs.
Tether has already insulated part of its US strategy from those questions through USA₮, which launched in January under Anchorage Digital Bank and was built specifically for the GENIUS framework. Tether says USDT, meanwhile, is still progressing toward GENIUS Act compliance.
That leaves Tether with two regulatory tracks: a federally structured US token already operating inside the new framework, and a $184 billion global stablecoin whose reserve mix, foreign regulatory status and US eligibility will face increasingly specific tests as the GENIUS rules are finalized.
Share
Most read articles
