WSJ “Genius law, Potential to become biggest risk to Tether”

An analysis has emerged suggesting that if the U.S. Congress's stablecoin regulation bill, the 'Genius Bill (GENIUS),' passes, it could pose the greatest burden to Tether, which holds a 66% market share.

The Wall Street Journal (WSJ) reported on the 26th (local time) that “The Genius Bill is an attempt to incorporate stablecoins into the official financial system and is a regulatory framework that imposes strict responsibilities on issuers,” pointing out that “It could act as a structural risk for Tether in particular.”

The bill mandates stablecoin issuers to maintain 1:1 reserves based on safe assets like cash and short-term U.S. treasuries for all circulating tokens, and requires issuers above a certain size to disclose annual financial statements audited by an external accountant.

The WSJ analyzed that “Tether holds part of its reserves in Bitcoin and gold, and has been embroiled in transparency controversies for years,” adding, “If the Genius Bill passes as is, Tether might have to significantly adjust its asset structure or reconsider its mode of operation in the U.S. to meet regulatory requirements.”

On the other hand, the bill has already gained support from some banks, fintech startups, and major corporations like Walmart in the U.S., and its influence on the industry is expected to be significant in terms of stablecoins entering the mainstream. Depending on Tether's response, forecasts suggest there could be changes in the dynamics of the stablecoin market in the future.