USDT two-year countdown: The GENIUS Act deadline puts pressure on Tether, can the stablecoin leader’s dominance be maintained?

Tether, the issuer of the world’s largest stablecoin USDT, is facing a crucial “two-year countdown.” The stablecoin bill, the U.S.《GENIUS Act》, passed in July 2025 and has been one year already, but regulators still have not completed the rulemaking within the statutory timeframe. Under the bill, all stablecoin issuers must be fully compliant by July 2028, or they will be forced to exit the U.S. market. For Tether, which accounts for 60% of the world’s stablecoin supply (over $300 billion), this is not only a regulatory issue—it is a life-or-death decision.
(Background: Wen Hongjun: The joint U.S.-UK announcement is a digital resurrection of “Eurodollars 2.0”)
(Background supplement: The joint U.S.-UK government announcement: plans to incorporate stablecoins into cross-border payments)

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• The new stablecoin landscape with three-way dominance
• Why Tether is struggling to become compliant?
• Lessons for Taiwan: the global wave of stablecoin regulation

The “first year” of the U.S. stablecoin regulatory framework is already behind us, but the real test has just begun. The《GENIUS Act》（Guiding and Establishing National Innovation for U.S. Stablecoins Act）, passed in July 2025, was originally seen as the most comprehensive legislation in Washington for stablecoin regulation, setting a clear compliance path for stablecoin issuers. However, a year later, according to reports, regulators still have not finished the rulemaking within the deadline required by the bill, but all rules will take full effect in July 2028.

For Tether, this means there is less than a two-year buffer. As the world’s largest stablecoin issuer, USDT currently accounts for 60% of the total $300 billion stablecoin supply, yet the company has long been almost “nonexistent” in the U.S. market—having neither U.S. banking partners nor registration as a regulated entity. The compliance journey for Tether is not a “tweak,” but a “restart.”

The new stablecoin landscape with three-way dominance

This regulatory storm is reshaping the stablecoin market map. The current competitive landscape can be divided into three camps:

First, Circle and USDC: As the most actively embracing compliant stablecoin issuer, Circle completed its IPO in 2024 and obtained licenses in multiple countries worldwide. Its reserves are made up entirely of U.S. dollar cash and short-term U.S. Treasuries, meeting the《GENIUS Act》requirements for reserve transparency. Circle has also recently been actively expanding into Asian markets, holding closed-door meetings in South Korea with multiple banks and exchanges, sending clear signals of its布局.

Second, the Open USD camp: A “shared-revenue” stablecoin model promoted jointly by multiple institutions. According to an analysis report, Open USD is seen as Circle’s biggest threat so far. These stablecoins distribute reserve earnings dividends to holders, breaking the traditional stablecoin business model of “issuers keep all the revenue.”

Third, Tether and USDT: The largest market share, but facing the strictest regulatory pressure. Tether CEO Paolo Ardoino has repeatedly stated that it “will not exit the U.S. market,” but the actual compliance path remains unclear. Analysts generally believe that Tether must complete U.S. banking partner relationships, reserve audits, and possibly apply for licenses before the 2028 deadline; otherwise, it will be forced to leave major U.S. exchanges.

Why Tether is hard to comply with regulations?

Tether’s predicament comes from the core contradiction of its business model: USDT’s high yield comes from the flexibility of its reserve investments, while U.S. regulation demands fully transparent, low-risk reserve allocation. If Tether fully complies with the reserve rules of the《GENIUS Act》, its profit model would be significantly compressed; if it does not comply, it faces the risk of exiting the market.

In addition, Tether’s place of registration and actual operational base have long been unclear, further increasing the difficulty of compliance. Although the company has begun adjusting its organizational structure in recent years, compared with Circle’s compliance foundation already established in the U.S., Tether’s starting point is clearly behind.

It is worth noting that the regulatory pressure from the《GENIUS Act》is not only targeted at Tether. All stablecoin issuers will face the same compliance wall, but because Tether has the highest market share and the weakest compliance foundation, it will be hit the hardest. Based on @Liebs00, a stablecoin analyst on the X platform, the stablecoin story actually has three battlefronts: Circle vs Open USD’s direct showdown, Tether’s defensive battle, and the contest over emerging regional markets.

Lessons for Taiwan: the global wave of stablecoin regulation

Taiwan’s regulators are also paying attention to stablecoin issues. The Financial Supervisory Commission has repeatedly stated it will push for a special stablecoin law, while the implementation experience of the U.S.《GENIUS Act》—including the compliance-enforcement gap after the bill passed—has important reference value for Taiwan’s legislative process. While Washington is still trying to catch up with its own timeline, Taiwan’s lawmakers should think more about how to design a flexible regulatory framework to avoid the predicament of “being unable to keep up with the market.”