Tether’s recent push to launch a U.S.-only stablecoin under the GENIUS Act is part of a broader strategy of regulatory arbitrage. By aligning with proposed U.S. federal rules for major issuers, Tether hopes to avoid Europe’s strict MiCA framework while still claiming U.S. jurisdiction for its next dollar-pegged token. With USDT’s market capitalization approaching $150 billion, the company is eager to secure clear regulatory guidance in the United States, even as it steps away from the European Union’s licensing requirements.
The GENIUS Act, which has been approved by the Senate Banking Committee and awaits full Senate consideration, would require any dollar-denominated stablecoin with a market cap over $10 billion to register with federal authorities. Under this bill, issuers must meet stringent standards for reserves, liquidity, and anti-money-laundering compliance. Foreign-based companies such as Tether, which is headquartered in El Salvador and lacks a formal U.S. office, would still need to satisfy these requirements if they want to operate legally in American markets.
In contrast, Europe’s MiCA framework demands that electronic-money tokens like USDT be issued by an EU-licensed entity that adheres to rigorous reserve and disclosure obligations. MiCA effectively bars unlicensed stablecoins from trading on EU platforms, and several exchanges, including Kraken and Crypto.com, have already delisted USDT for their European customers. Although existing tokens can still be held and transferred under ESMA guidance, Tether chose not to pursue MiCA authorization, citing concerns that the EU’s rules could threaten banking stability and restrict service for its roughly 400 million global users.
By targeting U.S. regulation rather than European approval, Tether plans to maintain its rapid issuance pace while sidestepping MiCA’s licensing hurdles. However, operating under the GENIUS Act does not grant Tether a blank check to mint unbacked tokens. The company must continue to hold one-to-one reserves in high-quality assets, undergo regular audits, and meet ongoing liquidity tests. In the short term, EU delistings may push trading volume toward non-EU venues or peer-to-peer channels, fragmenting liquidity across jurisdictions. Ultimately, Tether’s dual approach, opting out of MiCA while embracing U.S. federal oversight, reveals a calculated effort to gain regulatory clarity rather than to evade meaningful supervision.
