Genius Act Final Vote is TODAY. What will happen to Tether?
For the first time, it creates a comprehensive US licensing framework for stablecoins. Final voting in hours.
Let's dive into what this means for $USDT, $USDC, $USD1 and the broader ecosystem 🧵
1. The Senate's final voting for the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act) is on June 17, today.
The Act has already progressed through the Senate Banking Committee approved it 18-6 on March 13 and secured a successful cloture vote.
2. We are going to have three categories of permitted issuers:
1. Federal qualified nonbank issuers regulated by the Office of the Comptroller of the Currency - e.g. Circle and PayPal
2. Subsidiaries of insured regulated banks - e.g. JPMorgan, Bank of America
3. State-qualified issuers <$10 billion in mcap - startups, fintechs.
3. But what ACTUALLY is the bill about?
The most important parts are here:
- 100% reserve backing (USD + short-term treasuries),
- monthly independent attestations of reserve adequacy and custody of reserves,
- AML programs,
- guaranteed redemption at par value,
- *explicitly prohibits yield-bearing stablecoins*
4. Is USDe and other stables going to be banned? No.
Not banned outright, but excluded from the regulatory framework.
Simply cannot be marketed as "payment stablecoins".
5. When implementation hits (18 months post-enactment or 120 days after final rules), expect the floodgates to open. Trump pushing for August recess signing adds urgency to this timeline.
TradFi already prepare for stablecoin market entry with JP Morgan pioneering.
6. Tether potential issues?
Tether has never submitted to a full audit. As a foreign issuer (Salvador based), Tether must comply with US court orders or face prohibition from US markets.
Tether's CEO Paolo Ardoino said in Bloomberg's interview that "We are getting comfortable with the genius act" and the company is open to creating a separate domestic stablecoin to meet the needs of the U.S. market.
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