It seems this version was first uncovered here, which might pose challenges for the Defi Facilitator.
Posted on May 9, 2025, at 6:18 PM.
For nearly ten years, Tether, the largest stablecoin issuer globally, has been operating in a largely unregulated space, facing scrutiny over incomplete reserves and various rumors. Now, it appears Senate Republicans (and possibly some Democrats) are gearing up to bring Tether under U.S. oversight.
On Thursday, the Senate attempted to introduce a newly revised formal debate but failed to do so with a vote. Some lawmakers mentioned they hadn’t seen the text of the bill before casting their votes. However, on Friday, Unchained discovered a copy of the latest version. One notable change is that this version extends U.S. jurisdiction to foreign stablecoin issuers like Tether if they serve U.S. users, no matter their location. This modification broadens the range of assets eligible to back stablecoins, which could have significant implications for Tether.
This is a substantial advantage for Tether, which already holds a market cap of $150 billion, but other aspects of the bill could be less favorable for various sectors in the crypto market, especially Defi service providers.
Here are some key differences between this new bill and the previous draft reported by the Senate Banking Committee in March.
Notable Changes in the New Legislation
The new bill, still referred to as the Genius Act, sees two Democratic co-sponsors, Kirsten Gillibrand and Angela, join Republican sponsors Sen. Bill Hagerty and three others. The bill’s backing remains primarily from the GOP, which may affect its chances of passing in the Senate unless some Democrats also support it.
With the release of the full text, stakeholders in the crypto industry can now see how this version diverges from the previous bipartisan bill presented in March, assessing its potential impact on stablecoin regulation in the U.S.
Some experts anticipate another vote might happen by the end of the month to initiate discussions on the stablecoin bill in the Senate.
- Accountability for Foreign Issuers: The new provisions hold foreign stablecoin publishers accountable if they target U.S. consumers. This change clarifies the previously murky regulatory landscape for Tether, reinforcing the bill’s potential benefits for companies like it.
- Defining Digital Asset Service Providers: The updated definition now encompasses various participants in the crypto ecosystem, including developers and wallet providers, making them liable for the use of fraudulent stablecoins.
- Safe Harbor Provisions: This grants the Treasury Secretary the authority to offer regulatory flexibility for smaller or experimental projects while allowing for prompt action in urgent situations.
It remains unclear when Senate Democrats had the chance to review the revised bill, but changes might reflect discussions held behind closed doors prior to the vote.
As such, the crypto community is left to wonder about the legislative future and its implications for stablecoin regulation. Unchained reached out to Tether and the sponsoring Senators but did not receive responses by the time of publication.
