How Has Tether Influenced The Approval Of GENIUS Act?

Tether’s influence in the crypto space has grown substantially over the past few years, especially in Q1 this year. While Tether has not publicly endorsed any political bills, its presence in the market has had an unintended impact. 

With the rise of stablecoins and Tether’s dominant role, it’s clear that Tether’s position holds sway in global financial markets and even within US politics.

Tether Has Influence

Currently, Tether is one of the largest holders of US Treasuries in the world. With over $120 billion worth of US Treasuries, Tether is nearing the size of some countries like Germany in terms of its holdings. 

The ability of a single company to hold such substantial assets gives Tether a unique influence over global financial markets. This enormous holding suggests that Tether’s actions and decisions can shape political discourse, especially when it comes to policies related to finance and cryptocurrency.

Tether also dominates the stablecoin market, controlling 62% of its total value. With a market cap of $156 billion, Tether makes up the lion’s share of the $251.8 billion stablecoin market. Despite its significant market presence, Tether has remained cautious about direct political involvement. 

Tracy Jin, COO of MEXC, exclusively told BeInCrypto that Tether prefers to stay neutral on political matters, avoiding any public interventions.

“Tether doesn’t have the same lobbying presence in Washington that U.S.-based firms like Circle or Coinbase do. What it does have is undeniable market gravity. With $120 billion parked in Treasuries, Tether’s financial footprint in the US economy is already there, regardless of where the company is registered.

She added that Tether-issued USDT could be a factor of interest to the global economy.

“Some officials may see USDT as a net positive for the dollar’s global reach – a kind of Trojan horse that exports US monetary influence into parts of the world where the traditional banking system doesn’t reach. That narrative could’ve made Tether seem less threatening and more strategically useful.”

Tether’s avoidance of direct political engagement is noteworthy, as it allows the company to maintain a more independent stance in the volatile crypto market. Despite this, Jin added that Tether’s influence cannot be understated.

“I don’t believe Tether directly engineered the bill’s progress, but its sheer scale absolutely influenced the urgency… Tether has essentially become a systemically relevant actor in global markets. When a private stablecoin issuer holds more US debt than most countries, it forces regulators to take a hard look at the ecosystem they operate in.”

Is The GENIUS Act Receiving Special Treatment?

The GENIUS Act has quickly gained support from both liberal and conservative sides, making it one of the most widely supported cryptocurrency bills. Last week, the GENIUS Act passed the cloture vote and is now awaiting the final Senate vote. This move puts it on track to become the first-ever crypto bill to be approved in the US, likely within this week.

Tracy Jin noted that the race to become a pro-crypto country is likely fueling the urgency that has fast-tracked the approval of the GENIUS Act.

“The US saw Europe move forward with MiCA, and it was a wake-up call. The GENIUS Act lets America step in and define what a compliant, dollar-backed stablecoin looks like – and do it on its own terms. That’s appealing to both Republicans and Democrats. It’s a soft power play that reinforces the dollar without needing to launch a central bank digital currency… the political window was open. Crypto has matured, stablecoins have proven utility, and banks are getting more involved. Lawmakers saw a chance to lead – not react – and that opportunity doesn’t come often. So support coalesced quickly.”

As the bill heads towards a final vote, it’s clear that the support it has received reflects the growing importance of stablecoins like Tether in the global economy.