Tether's USDT Faces a Two-Year Clock to Stay on U.S. Crypto Exchanges

GENIUS Act sets a July 2028 deadline for issuers

President Trump signed the GENIUS Act into law on 18 July 2025. The Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act gives stablecoin issuers a three-year window to comply. One year has now passed, leaving foreign issuers until 18 July 2028 to meet the new standards.

The law requires issuers to hold reserves in the most liquid assets, essentially cash and U.S. Treasuries. Foreign issuers must also register with the Office of the Comptroller of the Currency (OCC). Their home regulators must be certified as comparable by the U.S. Treasury Secretary. Issuers must comply immediately with orders to freeze and seize assets tied to illicit actors, even during the grace period.

Tether holds a quarter of reserves in barred assets

Tether's latest disclosures show about 25% of USDT reserves sit in assets the law bars. These include precious metals, bitcoin holdings, and secured loans. As of the first quarter of 2026, U.S. Treasuries made up roughly 80% of reserves.

The remainder splits across gold, bitcoin, and other investments. Tether operates as a foreign issuer and is not U.S.-domiciled. That status means it must clear the extra registration and reserve tests before the deadline.

USDT ranks as the third-largest crypto asset

USDT traded at $0.999 at the time of publication, with a market cap near $184 billion (CoinPaprika, 20 July 2026). That figure makes it the third-largest crypto asset. The token recorded about $29 billion in trading volume over the prior 24 hours (CoinPaprika, 20 July 2026). Its scale explains why a U.S. delisting would ripple across major exchanges. Non-compliant stablecoins would lose access to U.S. institutions once the grace period ends.

"Non-compliant stablecoins cannot be used by U.S. institutions when the safe harbor expires in 2028", 18 July 2026. — Kevin Wysocki, Head of Policy, Anchorage Digital

Legal experts disagree on the compliance timing

Legal experts disagree on the exact timing for foreign issuers. Some read the safe harbor as granting the full runway to 18 July 2028. Justin Levine, a lawyer at Davis Polk, said foreign issuers must comply immediately with seize and freeze orders but have roughly two more years to prepare for the additional requirements. That runway keeps their coins eligible for U.S. listings if they meet those duties.

The OCC noted in a rulemaking proposal that the drop-dead date is generally 2028. That deadline can trigger sooner, the moment the law becomes effective, expected around January 2027, for foreign coins that miss certain requirements. Federal agencies have not yet finalized their GENIUS rules, which leaves the precise start date unsettled.

Tether launched USAT as a compliant alternative

Tether launched USAT in January 2026 through Anchorage Digital as a U.S.-compliant option. Usage remains at a relatively low level. Circle, a U.S.-based rival, has made more apparent effort to pre-comply. Tether Chief Executive Paolo Ardoino has said the company will comply with the GENIUS Act.

"We're going to spend the money on lawyers and lobbyists until someone walks up to our door and forces us to delist these non-U.S. issuers", 18 July 2026. — Trevor Tanifum, Managing Principal, FS Vector

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