Tether Unveils U.S.-Compliant Stablecoin via GENIUS Act, Set for 2025 Launch

Tether Ltd. has announced plans to launch a U.S.-compliant stablecoin under the framework of the newly enacted GENIUS Act, signaling a strategic pivot toward institutional markets and domestic liquidity enhancement. The stablecoin, distinct from Tether’s existing USDT product, is expected to enter the market by late 2025, according to CEO Paolo Ardoino, who emphasized its focus on U.S. institutional payments, interbank settlements, and trading [1]. This initiative aligns with the regulatory requirements of the GENIUS Act, which mandates full reserve backing, regular audits, and licensing for fiat-backed stablecoin issuers [2].

The new stablecoin will differ from Tether’s international USDT in its compliance with U.S. regulatory standards, potentially offering a more secure infrastructure for institutional clients. Ardoino highlighted the project’s alignment with the Act’s goals, stating, “It’s going to be focused on the U.S. institutional markets, providing an efficient stablecoin for payments but also for interbank settlements and trading” [1]. This move positions Tether to compete with other regulated stablecoins, such as Circle’s USDC, which expanded under similar regulatory clarity earlier this year [3].

The GENIUS Act, signed into law on July 18, has already triggered a $4 billion surge in stablecoin supply within a week, elevating the total market capitalization to over $264 billion [2]. The legislation has attracted traditional financial institutions, including banks and asset managers, to the stablecoin sector. For example, WisdomTree’s USDW stablecoin became the first SEC-registered product under the law, demonstrating the growing appetite for hybrid financial instruments [4]. JPMorgan and Citigroup have also signaled interest in stablecoin issuance, reflecting a broader structural shift in digital finance [3].

Tether’s entry into this space could reshape U.S. market dynamics by enhancing onshore liquidity for crypto assets like Bitcoin. Analysts suggest that increased institutional-grade stablecoin adoption may facilitate cross-border payments and tokenized assets, though success will depend on Tether’s ability to meet audit requirements and maintain reserve transparency [1]. The initiative also underscores the competitive landscape of fiat-backed stablecoins, which now account for 85% of the market under the new regulatory framework [3].

The market’s rapid response to the GENIUS Act highlights the strategic importance of compliance. While Tether’s USDT remains dominant with over 45% market share, the Act’s level playing field has enabled traditional players to innovate without prior regulatory ambiguity [2]. This shift has marginalized non-compliant stablecoin models, such as algorithmic and commodity-backed variants, which now face heightened scrutiny.

Tether’s compliance-driven expansion aligns with industry trends toward institutional-grade digital assets. By leveraging the GENIUS Act’s framework, the company aims to solidify its position in a market projected to grow as regulatory clarity attracts major financial institutions. However, the initiative’s long-term impact will hinge on its execution, including how it addresses audit protocols and institutional trust [1].

Sources:

[1] [Tether Announces New U.S. Compliant Stablecoin Initiative] (https://www.facebook.com/cryptosrus/videos/tkb9z-uxcsjk3ni7mp4/609594368528351/)

[2] [Stablecoin Supply Rises By $4B Amid New US Legislation] (https://www.cointribune.com/en/stablecoin-supply-surges-2025-genius-act/)

[3] [Banks Rush Into $264 Billion Stablecoin Market After ...] (https://coincentral.com/banks-rush-into-264-billion-stablecoin-market-after-trump-signs-new-law/)

[4] [US Crypto Legislation Triggers $4B Stablecoin Surge] (https://cryptoweekly.co/news/crypto-legislation-stablecoin-surge/)