The cryptocurrency world is watching closely as regulatory frameworks evolve — and few developments are more significant than the recently passed GENIUS Act in the U.S. Senate. This industry-backed legislation aims to establish a clear, comprehensive structure for stablecoin regulation, setting standards for issuance, reserves, and oversight. Paolo Ardoino, CEO of Tether — the world’s largest stablecoin issuer — recently shared insights on how the bill could impact his company’s operations and long-term strategy.
Tether’s Compliance Strategy Under the GENIUS Act
Ardoino emphasized that understanding the distinction between foreign and domestic issuers under the GENIUS Act is critical for Tether’s compliance planning.
“For us, it's important to understand how the GENIUS Act differentiates between foreign and domestic issuers. We're looking at it in a way that allows us to comply while still focusing on international markets,” said Ardoino in a recent Bloomberg Television interview.
While Tether does not currently offer services directly to U.S. retail customers, much of its reserve composition already aligns with proposed U.S. requirements — including holdings in cash and short-term U.S. Treasury securities. However, Tether also holds non-permissible assets like Bitcoin and secured loans, which would need to be restructured if the company pursued a formal U.S. license.
Under the new framework, stablecoin issuers must back tokens 1:1 with safe assets such as cash or government securities and adhere to strict anti-money laundering (AML) and Know Your Customer (KYC) protocols under the Bank Secrecy Act. Given Tether’s scale, any application for U.S. authorization would place it under federal supervision.
Despite these regulatory hurdles, Ardoino sees opportunity.
“Stablecoins are certainly important in the U.S., but Americans already have many payment options — PayPal, credit cards, debit cards, cash. Our focus remains on the 3 billion unbanked and underbanked people globally,” he noted.
This strategic emphasis underscores Tether’s mission: financial inclusion through accessible digital money in regions where traditional banking infrastructure is limited or absent.
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Why Ardoino Believes Europe Lags Behind the U.S. in Stablecoin Innovation
In contrast to the U.S., Ardoino criticized Europe’s Markets in Crypto-Assets (MiCA) regulation as overly restrictive. MiCA mandates that stablecoin issuers hold reserves primarily in bank deposits — a model Tether views as risky, especially in light of past banking crises like the Silicon Valley Bank collapse.
“Requiring all reserves to sit in banks creates systemic risk. We’ve seen what happens when confidence erodes,” Ardoino pointed out.
The GENIUS Act, by comparison, permits a broader range of reserve assets — including U.S. Treasuries and money market funds — offering greater flexibility and resilience. This approach mirrors Tether’s current reserve strategy and positions the U.S. as a more innovation-friendly jurisdiction.
Moreover, Tether has a track record of cooperation with U.S. authorities, having worked with agencies like the FBI and Department of Justice for years. The company enforces rigorous KYC and AML procedures across its ecosystem, reinforcing Ardoino’s confidence that Tether can operate compliantly within the American framework if it chooses to expand there.
Advancing Transparency: Tether’s Push for Full Reserves Audits
Transparency remains a cornerstone of Tether’s evolution. In March, the company appointed Simon McWilliams as its new CFO — a move signaling deeper institutionalization. With over two decades of experience in investment management and financial auditing, McWilliams is leading efforts to enhance Tether’s accountability and regulatory readiness.
Currently, Tether undergoes quarterly attestations by BDO, one of the world’s top five independent accounting firms. Its reserves are managed by Cantor Fitzgerald & Co., a firm formerly led by Howard Lutnick, who now serves as U.S. Secretary of Commerce.
But attestation isn’t enough for long-term credibility.
“A full audit is our top priority,” Ardoino stated firmly.
Tether is actively engaging with the Big Four accounting firms to achieve this goal — a milestone that would significantly bolster trust among regulators, institutions, and users worldwide.
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Are Big Banks a Threat to Tether’s Dominance?
Recent reports from The Wall Street Journal reveal that major financial institutions — including JPMorgan Chase, Bank of America, Citigroup, and Wells Fargo — are exploring a joint venture to launch their own stablecoin. This has sparked debate about potential competition in the digital dollar space.
Ardoino remains unfazed.
“We’re not worried about competition from large banks because they’ll focus on the Western world. Our users are the 3 billion people without bank accounts.”
This distinction highlights a fundamental divergence in market focus: traditional banks are likely targeting enterprise payments and institutional use cases within developed economies, while Tether continues to serve cross-border remittances, microtransactions, and everyday commerce in emerging markets.
With over $2.489 trillion in cumulative transaction volume facilitated by USDT annually, Tether’s network effect and global adoption present formidable barriers to entry — even for well-capitalized incumbents.
Frequently Asked Questions (FAQ)
Q: Is Tether compliant with U.S. regulations?
A: While Tether isn’t currently licensed to serve U.S. retail customers, much of its reserve structure aligns with proposed rules under the GENIUS Act. The company complies with KYC and AML standards and works with U.S. law enforcement agencies.
Q: Can USDT be used in countries with strict crypto laws?
A: Yes, USDT operates peer-to-peer and is widely used in regions with limited banking access, though local regulations may affect accessibility. Users should always verify compliance with national laws.
Q: Will Tether issue a U.S.-based stablecoin?
A: It’s possible, but only if regulatory conditions allow for innovation without compromising global reach. Tether is evaluating options but remains focused on international markets.
Q: How often are Tether’s reserves verified?
A: Tether publishes quarterly attestations from BDO. A full audit with a Big Four firm is underway and considered a top strategic objective.
Q: Why is the GENIUS Act important for stablecoins?
A: It establishes clear rules for issuance, reserve backing, and consumer protection — creating legal certainty that benefits both innovators and users.
Q: Does Tether use Bitcoin in its reserves?
A: Yes, part of Tether’s treasury includes Bitcoin investments, though these are separate from the 1:1 reserves backing USDT.
Final Thoughts: Regulation as an Opportunity
For Paolo Ardoino, evolving regulation isn’t a threat — it’s a catalyst for legitimacy. The GENIUS Act offers a balanced path forward: one that protects consumers without stifling innovation. Meanwhile, MiCA’s rigid approach highlights the risks of overregulation.
Tether’s strength lies not just in technology or market share, but in its ability to adapt — maintaining compliance while serving those left behind by traditional finance.
As stablecoins become central to both decentralized ecosystems and future digital dollar initiatives, companies like Tether are positioned at the intersection of finance, technology, and inclusion.
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