Introduction
A wave of regulatory developments is reshaping the landscape for the two largest U.S. dollar–pegged stablecoins—USDT and USDC. The SEC has clarified that certain fully backed stablecoins are not securities, while the GENIUS Act has established a comprehensive federal framework. Meanwhile, Tether has launched a new compliant stablecoin, USAT, to re-enter the U.S. market. These moves signal a turning point in how stablecoins operate under U.S. law.
SEC Clarifies Status of Covered Stablecoins
In April 2025, the SEC’s Division of Corporation Finance issued a statement clarifying that “covered stablecoins”—those backed one-to-one by U.S. dollars or other low-risk, liquid assets and redeemable on demand—do not qualify as securities under federal law . This guidance applies to stablecoins like USDC and potentially USDT, provided they meet strict criteria: full backing, no yield or profit, and immediate redemption .
However, the guidance is non-binding and limited to staff-level interpretation. It does not carry the force of law, and the SEC retains discretion to revisit or refine its stance . Notably, USDT’s reserve composition—often including crypto assets and precious metals—may disqualify it from “covered stablecoin” status .
GENIUS Act: A New Federal Framework
In July 2025, the U.S. enacted the GENIUS Act, a landmark law establishing a federal regulatory framework for payment stablecoins . The law mandates that issuers maintain one-to-one backing with U.S. dollars or high-quality collateral, submit to audits, and comply with anti-money laundering standards .
Under the GENIUS Act, only permitted issuers—such as banks or licensed trust companies—can issue stablecoins. Non-compliant tokens face prohibition from secondary market trading or being offered by U.S. digital asset service providers after a grace period . The Treasury also gains authority to restrict non-compliant foreign issuers .
Tether’s Return to the U.S. with USAT
In January 2026, Tether announced the launch of USAT, a new stablecoin designed specifically for the U.S. market and compliant with the GENIUS Act . Issued via Anchorage Digital and with Cantor Fitzgerald as custodian, USAT marks Tether’s re-entry into the U.S. after regulatory challenges in 2021 related to reserve transparency .
USAT targets institutional and financial clients and aims to meet regulatory requirements that USDT cannot satisfy. The move positions Tether to compete directly with Circle’s USDC under the new legal framework .
Market Context and Implications
USDC has seen substantial growth, doubling its supply to over $60 billion and increasing its market share to 25%—though it still trails USDT, which holds around $144 billion and 63% of the stablecoin market . This growth is partly driven by USDC’s regulatory compliance and acceptance under frameworks like MiCA in Europe .
The GENIUS Act is expected to further institutionalize stablecoins as a form of digital cash, potentially expanding the market to trillions of dollars by 2030 . However, critics warn of a loophole: while issuers cannot pay interest, exchanges may still offer yield-like rewards, which could undermine the law’s intent .
What’s Next for the Market
As the regulatory environment evolves, several key developments are on the horizon:
- Implementation of SEC and Treasury rules: The finalization of the Stablecoin Regulatory Framework Draft (SRFD) could introduce new compliance standards for reserves, disclosures, and issuance by late 2025 or early 2026 .
- Market shifts: USDC may continue gaining market share due to its regulatory alignment, while USDT’s future in the U.S. hinges on USAT’s adoption and compliance.
- Institutional adoption: With clearer rules, stablecoins may become more integrated into traditional finance, potentially reshaping payment systems and treasury operations.
Conclusion
The regulatory landscape for stablecoins in the U.S. is undergoing a fundamental transformation. The SEC’s clarification on “covered stablecoins” provides some legal clarity, while the GENIUS Act establishes a robust federal framework. Tether’s launch of USAT signals a strategic pivot toward compliance. As these developments unfold, USDC appears well-positioned to benefit, while USDT’s future depends on its ability to adapt. The market now watches for implementation details, enforcement actions, and how institutional players respond under the new rules.
