Some changes in the GENIUS bill are believed to help Tether achieve legal legitimacy and expand operations in the U.S. However, hopes for the passage of GENIUS are diminishing as the bill recently failed in the Senate.

The GENIUS Act (Guidance and Establishment of National Innovation for Stablecoins Act of 2025) did not pass the cloture procedure in the Senate, causing great disappointment for many supporters and slowing down the process of establishing a legal framework for digital assets in the U.S.

The bill was initiated by Senator Bill Hagerty and co-sponsored by Tim Scott, Kirsten Gillibrand, Cynthia Lummis, and Angela Alsobrooks. The GENIUS Act requires:

  • Stablecoins are 100% backed by USD or equivalent liquid assets.

  • Conduct annual audits for stablecoins with a market capitalization over $50 billion.

  • Prohibit the issuance of foreign stablecoins in the U.S., while still allowing circulation in the secondary market.

  • Empower the Treasury Department to take action against foreign stablecoin issuers.

Although the bill has been amended to include stricter provisions on anti-money laundering (AML) and the responsibilities of stablecoin issuers, it is still strongly opposed by the Democratic Party. Senators are concerned that the GENIUS Act will increase the link between politics and crypto, thereby creating unwanted influences on the U.S. financial system.

Although it did not pass the cloture procedure in the Senate, it is likely that the bill will continue to be discussed among lawmakers.

Upon further investigation, legal experts note that the GENIUS bill has many provisions that will benefit the world's largest stablecoin issuer, Tether.

Foreign issuers will also be held accountable

The new GENIUS bill adds the concept of "extraterritorial jurisdiction," meaning that if a stablecoin issuer is outside the United States but targets American customers, they must still comply with these stablecoin regulations.

This provision will end Tether's ambiguous regulatory status, and it is also predicted to benefit the world's largest stablecoin issuer.

Definition of digital asset service provider

The new definition will be expanded to include parts of the cryptocurrency ecosystem such as developers, validator nodes, and self-custody wallet providers.

Digital asset service providers will now be held accountable if they use unauthorized stablecoins (stablecoins not from the issuing entity, such as decentralized stablecoins).

Safety powers

The bill grants the Secretary of the Treasury limited safety powers to provide management flexibility for small or experimental projects, but also allows regulatory agencies to act unilaterally in "emergency situations."#TetherUpdate