The US "GENIUS Act" reshapes the stablecoin landscape, posing severe challenges for USDT.

The U.S. GENIUS Act Reshapes the Global Stablecoin Landscape

With the formal signing of the "GENIUS Act", the United States has established a regulatory framework for digital stablecoins for the first time, which means that many stablecoin issuers will face new challenges. This article will answer the following key questions:

  • What stablecoin regulatory measures does the "GENIUS Act" propose?
  • What impact does the bill have on USDT and its issuing company?
  • The difference between this bill and the Hong Kong Stablecoin Ordinance

In the era of stablecoin "compliance cleansing", how will the GENIUS Act reshape the global stablecoin landscape?

1. Main Content of the "GENIUS Act"

The full name of the "GENIUS Act" is "Guiding and Establishing the National Innovation Act for U.S. Stablecoins", which aims to establish a legal and regulatory framework for payment stablecoins to promote financial innovation, protect consumers, strengthen monetary sovereignty, and maintain financial stability. The main content includes:

  1. Core definitions and scope: Regulation of payment stablecoins requires that only "approved payment stablecoin issuers" can issue stablecoins in the United States.

  2. Regulatory Framework: Establish a dual-track regulatory system. Stablecoins with an issuance amount exceeding 10 billion USD are subject to the regulatory framework of the Federal Reserve Board and the Office of the Comptroller of the Currency, while those below 10 billion USD may choose state regulatory pathways.

  3. Reserve requirement: The issuer must hold at least one dollar in permissible reserves for every dollar of stablecoin issued, including coins and currency, bank deposits, short-term government bonds, etc.

  4. Transparency and Disclosure Requirements: Issuers need to establish and disclose stablecoin redemption procedures, and regularly report on the outstanding stablecoins and the composition of reserves.

  5. National Security and Anti-Money Laundering Clauses: Require issuers to maintain anti-money laundering and sanctions compliance programs, monitor suspicious activities, and establish customer identification procedures, etc.

How does the GENIUS Act reshape the new landscape of global stablecoins in the "compliance washing" era?

II. The Impact of the Bill on USDT and Tether Company

USDT is one of the most representative stablecoins in the current cryptocurrency market, issued by Tether. The "GENIUS Act" will severely restrict the development of USDT, making it difficult for Tether to meet the compliance requirements of the Act:

  1. Reserve funds do not meet standards: The bill requires 100% reserves, while USDT currently has reserves of only around 85%.

  2. Non-compliance of auditing institution: BDO Italia used by Tether does not meet the standards of the Public Company Accounting Oversight Board in the United States.

  3. Assets that need to be sold due to non-compliance: Bitcoin, precious metals, corporate notes, and other asset reserves that do not meet the requirements of the law need to be replaced.

  4. Difficult to support regular disclosure and strict anti-money laundering requirements.

If Tether fails to meet the requirements of the bill, it will face severe penalties:

  • USDT may be deemed an "illegal payment instrument", and the company could face criminal charges.
  • It is prohibited to issue, sell, or provide trading services within the United States.
  • May be included in the Treasury Department's "non-compliance list", leading to USDT being forcibly delisted from US platforms.
  • Violations may face a daily fine of up to $1,000,000.

In the era of "compliance washing" for stablecoins, how will the GENIUS Act reshape the new landscape of global stablecoins?

3. The Differences Between the "GENIUS Act" and Hong Kong's "Stablecoin Regulation"

The U.S. GENIUS Act and Hong Kong's stablecoin regulations differ in the following aspects:

  1. Issuer Access Requirements:

    • United States: Must be a registered entity in the United States or a foreign entity registered through the OCC.
    • Hong Kong: Must be a company registered in Hong Kong or an overseas bank recognized by the Monetary Authority.
  2. Reserve asset requirements:

    • United States: Cash only and US Treasury bonds maturing within 93 days.
    • Hong Kong: Reserve assets must be strictly consistent with the anchored currency.
  3. Transparency and Audit Standards:

    • United States: Requires PCAOB certified organizations to conduct annual audits.
    • Hong Kong: Only "independent audit" required.
  4. Penalties for Illegal Activities:

    • United States: A maximum fine of $1 million per day.
    • Hong Kong: Maximum fine of 10 million HKD and 10 years imprisonment.

Overall, Hong Kong's policies are more balanced between stability and innovation, with greater inclusiveness; the United States focuses more on maintaining the dominance of the US dollar, with stricter restrictions on US dollar stablecoin issuers.

In the era of stablecoin "compliance cleaning", how does the GENIUS Act reshape the global stablecoin landscape?

How does the GENIUS Act reshape the new landscape of global stablecoins in the era of "compliance washing"?

In the era of stablecoin "compliance washing", how does the GENIUS Act reshape the global stablecoin landscape?

In the era of "compliance cleansing" for stablecoins, how does the GENIUS Act reshape the new landscape of global stablecoins?

View Original
This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.
  • Reward
  • 8
  • Share
Comment
0/400
FlippedSignalvip
· 08-03 20:24
Is USDT gone? Better withdraw early.
View OriginalReply0
StakeTillRetirevip
· 08-03 13:13
Is USDT going to face difficulties?
View OriginalReply0
JustHereForAirdropsvip
· 08-03 05:58
Regulation is here, USDT is going to Rug Pull, right?
View OriginalReply0
HodlVeteranvip
· 08-02 08:24
Bear Market professional catch a falling knife, old suckers are here
View OriginalReply0
MrDecodervip
· 08-01 19:22
USDT is doomed this time.
View OriginalReply0
GhostAddressHuntervip
· 08-01 19:20
USDT pill
View OriginalReply0
RugPullAlertBotvip
· 08-01 19:05
The good days for usdt are over~
View OriginalReply0
LiquidityHuntervip
· 08-01 18:58
Tsk tsk, the usdt Order Book Depth was abnormal last night, as expected from my intuition.
View OriginalReply0
Trade Crypto Anywhere Anytime
qrCode
Scan to download Gate app
Community
English
  • 简体中文
  • English
  • Tiếng Việt
  • 繁體中文
  • Español
  • Русский
  • Français (Afrique)
  • Português (Portugal)
  • Bahasa Indonesia
  • 日本語
  • بالعربية
  • Українська
  • Português (Brasil)