GENIUS Act: What the US Stablecoin Law Changes for USDT and for Anyone Paying Abroad
The first US federal stablecoin law requires full reserves and monthly reports. For USDT, issued outside the US, the route is the foreign issuer pathway, with a three-year deadline.
Historical reference: July 22, 2025. Published on this site on November 2, 2026. Dates in the text identify the period covered.
In this article
Key points
- President Donald Trump signed the GENIUS Act on July 18, 2025, the first US federal law for payment stablecoins.
- Issuers must hold 1-to-1 reserves in liquid assets, disclose their composition every month and publish a clear redemption policy. Paying interest merely for holding the coin is prohibited.
- USDT, issued by Tether outside the US, will have to follow the foreign issuer pathway to stay on American platforms. The company's CEO spoke of a three-year deadline.
- The law applies to the American market. For anyone paying an overseas supplier with USDT, the effect is indirect and depends on regulations yet to be written.
São Paulo, July 22, 2025 — On Friday (18), US President Donald Trump signed the GENIUS Act (short for Guiding and Establishing National Innovation for U.S. Stablecoins), the first American federal law to regulate stablecoins. The House passed the text on July 17, by 308 votes to 122; the Senate had already approved it on June 17, by 68 to 30. The market is still working out what the law changes in practice, especially for USDT, the world's most widely used stablecoin.
- Minimum reserve in liquid assets for each stablecoin issued
- 1 to 1
- USDT supply on 7/18/2025, according to The Block
- ~US$162 bn
- USDC supply, from Circle, on the same date
- ~US$63 bn
- Maximum time for the law to take effect, or 120 days after the final rules, whichever comes first
- 18 months
What the law requires of issuers
The text covers payment stablecoins: digital coins that the issuer commits to exchange for a fixed amount of money, such as the dollar. The text of the law and the fact sheet the White House released on the day of signing set out the core rules.
There are also disclosure rules: the issuer may not present the coin as backed by the US government, covered by federal deposit insurance or legal tender. And any issuer with more than US$50 billion in circulation must prepare and publish audited annual financial statements (section 4).
Who can issue in the United States
Only an authorized issuer will be able to offer payment stablecoins in the American market. There are three paths: the federal one (subsidiaries of insured banks and nonbank institutions supervised by the OCC, the regulator of national banks), the state one (for issuers with up to US$10 billion in circulation, under regimes considered substantially similar to the federal one) and the foreign issuer one.
| Path | Who uses it | Main condition |
|---|---|---|
| Federal | Banks and nonbank issuers | Federal authorization and supervision, with reserves and reports as set by the law |
| State | Issuers with up to US$10 billion in circulation | State regime considered substantially similar to the federal one |
| Foreign | Issuers based outside the US | Home-country regime considered comparable by the US Treasury, registration with the OCC and reserves at a US financial institution sufficient to meet American customers' needs (section 18) |
What changes for USDT
Tether, the issuer of USDT, is based outside the US. The law gives it a deadline: after three years, digital asset platforms will only be able to offer American users stablecoins from authorized issuers or registered foreign ones. In an interview with Decrypt, Tether CEO Paolo Ardoino said the company will work to comply through the foreign issuer pathway and that it "has three years" to do so.
We'll be working very, very hard to make sure we comply with the foreign issuer pathway within the GENIUS Act.
Paolo Ardoino, Tether CEO, to Decrypt (7/18/2025)
According to Decrypt, Tether still plans to submit its reserves to a full audit, which has never been done, and keeps its plan to launch a separate stablecoin for the American market. For Ardoino, in the US USDT can serve mainly for remittances from foreign workers to their families. Circle, the US-based issuer of USDC, got ahead: CEO Jeremy Allaire said the law "enshrines in law Circle's way of doing business." Anyone who wants to understand USDT from scratch will find the basics in What is USDT; Tether's headquarters move is covered in Tether moves to El Salvador.
The law takes effect 18 months after signing or 120 days after regulators publish the final rules, whichever comes first. Which countries will have regimes considered comparable has not yet been decided. Until then, nothing changes in how USDT operates or on the networks where it circulates.
And for Brazil and for anyone paying abroad
The GENIUS Act is American law and applies to the US market. It does not change how USDT works on the TRON network or the Brazilian rules, which the Central Bank is still preparing. The effects for importers are indirect:
- Reserve standard. American coins gain a public benchmark for backing and transparency, which regulators in other countries, including the Central Bank of Brazil, can use as a reference.
- Competition among issuers. Issuers that comply gain access to the American market. It is an advantage for USDC and for American banks' stablecoins; USDT depends on registering as a foreign issuer.
- Liquidity supply. The size of the stablecoin market, today concentrated in USDT, may be redistributed in the coming years. If that happens, the overseas supplier may come to prefer another coin, which is worth watching.
- European link. Europe got there first, with MiCA, and platforms such as Coinbase removed USDT for European customers, as the MiCA case shows.
For the supplier payment flow, the practical consequence today is none: USDT on TRON keeps operating with the same technical standard. What is worth monitoring is Tether's registration in the US and the Brazilian stablecoin regulation, which should come from the Central Bank.
Frequently asked questions
What is the GENIUS Act?
It is the American federal law, signed on July 18, 2025, that creates rules for payment stablecoins: full reserves in liquid assets, monthly disclosure of their composition, a public redemption policy, anti-money laundering rules and a ban on interest for the mere act of holding the coin.
Does the GENIUS Act ban USDT in the United States?
No. The law gives three years for platforms to start offering only stablecoins from authorized issuers or registered foreign issuers. Tether said it will follow the foreign issuer pathway, which depends on its home-country regime being considered comparable.
When does the GENIUS Act take effect?
On the earlier of 18 months after signing (January 2027) and 120 days after regulators publish the final rules. The regulations still have to be written.
Does the GENIUS Act affect people who use USDT in Brazil?
Not directly, because it is American law. The effect is indirect, through the reserve and transparency standard that serves as a reference and through competition among issuers. What applies in Brazil is the Central Bank's regulation.
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Sources
- Public Law 119-27: Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act · Government Publishing Office, Jul 18, 2025
- Fact Sheet: President Donald J. Trump Signs GENIUS Act into Law · Casa Branca, Jul 18, 2025
- Trump signs stablecoin GENIUS Act, cementing first major crypto framework in US law · The Block, Jul 18, 2025
- Tether CEO: USDT is coming to America; Circle CEO isn't afraid · Decrypt, Jul 18, 2025
- Trump signs stablecoin law as crypto industry aims for mainstream adoption (Reuters) · The Star, Jul 19, 2025
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