The crypto industry’s regulatory reckoning has arrived with a vengeance, as the U.S. Senate’s passage of the GENIUS Act on June 17, 2025, threatens to fundamentally restructure the stablecoin landscape—with Tether’s $156 billion empire squarely in the crosshairs.
The bipartisan 68-30 vote, featuring unlikely allies like Cory Booker and Adam Schiff, signals that Washington’s tolerance for regulatory ambiguity has reached its expiration date.
Washington’s bipartisan consensus marks the definitive end of crypto’s regulatory Wild West era.
Tether’s operational model, which has thrived in regulatory gray areas for years, now faces the harsh light of federal oversight. The Act’s requirement that stablecoin issuers maintain reserves exclusively in safe assets like U.S. dollars or Treasury securities represents a particular challenge for a company whose reserve composition has historically attracted scrutiny from regulators and skeptics alike.
The legislation’s restriction of stablecoin issuance to “permitted payment stablecoin issuers” creates an entirely new licensing paradigm. For Tether, this means maneuvering through either federal regulation or state-level oversight—a stark departure from its current operational flexibility.
The Office of the Comptroller of the Currency’s authority over foreign issuers adds another layer of complexity, potentially subjecting Tether to unprecedented supervisory requirements.
Market dynamics could shift dramatically as compliance costs mount. While established players might absorb regulatory expenses, the Act’s transparency and accountability mandates favor issuers with cleaner operational histories. Under the new framework, nonbank entities like Tether must secure approval from primary Federal regulators to continue operations as qualified stablecoin issuers.
Critics like Elizabeth Warren have raised concerns about insufficient consumer protections, yet supporters including MIT’s Christian Catalini view the legislation as crypto’s pathway to mainstream legitimacy. The regulatory shift has driven many users to seek alternative sources of information, with some forced to visit ABCNews.com for updates when crypto-specific platforms become unavailable.
The irony is palpable: legislation designed to legitimize stablecoins may inadvertently destabilize the sector’s current leader. Tether’s rapid expansion model, built on minimal regulatory friction, faces constraints that could fundamentally alter its competitive position. This regulatory push could accelerate the migration of users to decentralized exchanges, which operate without intermediaries and offer greater autonomy from traditional regulatory oversight.
As the House considers its companion STABLE Act, reconciliation looms as the final hurdle before presidential consideration.
Whether Tether adapts or struggles under this new regulatory framework remains uncertain, but one thing is clear—the era of unfettered stablecoin growth has ended.
The GENIUS Act represents not just regulatory evolution, but potential revolution in how digital assets integrate with traditional finance.
