Tether Must Reshape USDT Reserves to Stay in U.S. Market
Tether's flagship USDT stablecoin could disappear from U.S.-regulated trading platforms by mid-2028 unless the issuer brings its reserve portfolio into line with new federal requirements under the GENIUS Act, creating one of the biggest regulatory challenges in the token's history.
Summary
- The GENIUS Act gives foreign stablecoin issuers until July 2028 to meet U.S. standards.
- Current reserve composition remains one of the key obstacles to compliance.
- Tether has launched a separate U.S.-focused stablecoin while continuing to position USDT as a global product.
- The outcome will determine whether USDT remains available through regulated U.S. financial intermediaries.
Compliance Hinges on Reserve Structure
The GENIUS Act gives stablecoin issuers until July 18, 2028, to comply with a federal framework governing reserve management, disclosures and regulatory oversight. After that date, U.S.-regulated exchanges, brokers and custodians will be prohibited from supporting payment stablecoins that fail to meet the law’s requirements.
For Tether, the main challenge lies in the composition of USDT’s reserves.
While the company holds more than $117 billion in U.S. Treasuries, its reserve portfolio also includes Bitcoin, precious metals and secured loans. Those assets do not satisfy the reserve standards established under the GENIUS Act, which are centered on cash and short-term Treasury securities.
According to Tether’s latest attestation, approximately 25% of USDT’s reserves remain invested in assets outside that framework, meaning the company would need to significantly adjust its balance sheet if it intends for USDT to remain available through regulated U.S. intermediaries after the transition period ends.
A Two-Track Strategy Is Emerging
Rather than immediately redesigning USDT, Tether has already begun separating its U.S. and international businesses.
The company recently introduced USA₮, a stablecoin issued through Anchorage Digital Bank that is designed specifically to comply with U.S. regulatory requirements.
READ MORE: OKX Europe Rolls Out USDT-to-USDC MiCA Conversion Service
Meanwhile, Tether has continued to describe USDT as a product primarily serving international markets, particularly regions where access to U.S. dollars and traditional banking infrastructure remains limited.
The approach suggests Tether may ultimately operate two distinct stablecoin products: one tailored to U.S. regulation and another for global markets where reserve requirements differ.
Questions Remain Over Tether’s Long-Term Plan
Chief Executive Paolo Ardoino previously indicated that Tether intended to comply with the GENIUS Act’s requirements.
However, despite renewed industry attention following implementation of the legislation, the company has not publicly clarified whether it plans to restructure USDT itself, rely on a future regulatory equivalence framework for foreign issuers or focus its U.S. strategy exclusively on USA₮.
That uncertainty has become increasingly relevant as regulators begin drafting the detailed rules that will govern implementation of the law over the next two years.
The Stakes Extend Beyond Tether
The issue is not whether USDT will cease to exist.
Instead, the legislation determines whether U.S.-regulated financial institutions can continue supporting the token after the transition period expires.
If USDT remains outside the federal framework, regulated exchanges, brokers and custodians would be required to delist or discontinue support for the stablecoin in the United States, even if it continues operating internationally.
For the broader stablecoin market, the deadline marks a pivotal test of how global issuers adapt to national regulatory regimes. It also highlights a growing divide between stablecoins designed for worldwide use and those built specifically to satisfy domestic financial regulations, a distinction that is likely to shape competition in the sector over the coming years.
The information presented in this article is intended for informational purposes only and should not be interpreted as financial, investment, or trading advice. Coinspress.com does not promote or advocate for any particular investment strategy, asset, or cryptocurrency project. Cryptocurrency markets are highly volatile and unpredictable – always perform your own research and seek guidance from a qualified financial professional before making any investment decisions.
Alexander Stefanov
Reporter at CoinsPress
Alex is Editor-in-Chief of Coinspress and co-founder of Millennial Media Group, with nearly a decade of experience covering financial markets - crypto first, then everything else. It started in 2016 with Bitcoin. Like most people at the time, he didn't fully understand it - so he kept digging. Blockchain, tokenomics, the projects, the cycles. That curiosity never stopped, and eventually pulled him into traditional markets too: equities, commodities, macro. Not because he left crypto behind, but because you can't properly understand one without the other. What drives him is straightforward: he wants to know why something is happening, not just that it's happening. Most market coverage stops at the headline - price up, price down, here's a chart. Alex finds that kind of reporting actively unhelpful. If you walk away from an article without understanding the mechanism behind the move, what did you actually learn? He holds a degree in Tourism from New Bulgarian University - not the most obvious path into financial markets, but markets have a way of pulling in people who are simply too curious to stay out. He has authored over 200 in-depth analyses and more than 10,000 articles across crypto and traditional finance. He still thinks every day in markets teaches him something new. That's probably why he hasn't stopped.
