Tether’s $3 Billion USDT Mint Raises Questions Amid Stablecoin Law Passage

Tether, a major player in the crypto space, has created $3 billion worth of popular stablecoin USDT within a single day. This significant and sudden increase in supply comes at a time when the United States is moving closer to introducing new rules for stablecoins

These rules, under the proposed GENIUS Act, may change how stablecoins operate in the country. As a result, market attention could shift toward regulated alternatives such as Ripple’s RLUSD.

Tether Increases Supply As GENIUS Act Sets New Standards

Blockchain tracking platform Lookonchain revealed that Tether minted another $1 billion worth of USDT. This brings the total stablecoin minted on July 17 to $3 billion. Market experts suggest that this move aims to boost liquidity and support the recent price movements of Bitcoin (BTC)

This move comes shortly after the GENIUS Act passed a procedural vote in the U.S. House of Representatives. The proposed law seeks to set federal standards to ensure stability and transparency in the market

If signed into law, the bill would require stablecoin issuers to follow strict federal guidelines. Crypto firms will be required to hold only cash or secure, short-term assets and secure formal licenses to operate

They must also publish financial records that have been independently audited

Tether May Face Regulatory Pressure Under New U.S. Law

These proposed rules could pose a significant challenge for Tether, which currently controls over 66% of the global stablecoin market. Unlike complete audits, Tether only provides attestations, and its reserves include Bitcoin and precious metals

Meanwhile, in the past, the company has been criticized for its unclear reserve practices Under the GENIUS Act, this might not be enough to continue operating legally in the U.S

On the bright side, the law does offer some breathing room. The Senate version gives a three-year grace period, while the House version offers 18 months. This gives Tether time to either adjust its reserve structure or consider launching a new, U.S.-compliant version of its stablecoin

Ripple and Circle May Gain from New Regulation

Ripple’s stablecoin, RLUSD, appears ready to follow the new rules. Ripple has applied for a national trust bank charter and a Federal Reserve master account. It also announced that BNY Mellon will serve as the official custodian of RLUSD reserves, which the U.S. Treasury backs

These steps show that RLUSD is designed to meet the legal requirements outlined in the GENIUS Act. If the act becomes law, RLUSD may be among the first stablecoins entirely accepted under U.S. regulation

This may lead to a large shift of funds away from USDT and into compliant alternatives. Circle, the company behind USDC, is another possible beneficiary. Following news of the bill’s progress, Circle’s stock rose by 34%, reflecting investor confidence in stablecoins that adhere to government regulations.

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