A Quarter of Tether’s $190 Billion Reserve Portfolio Is Not…

Tether would need to restructure roughly one-quarter of its approximately $190 billion reserve portfolio for USDT to satisfy the U.S. GENIUS Act’s reserve-asset requirements, based on the stablecoin issuer’s latest disclosed holdings and the assets permitted under the new federal framework.Tether reported approximately $187.75 billion of assets backing its tokens as of June 30, against $183.64 billion of liabilities, leaving a $4.11 billion reserve buffer. USDT issuance stood at approximately $184.6 billion.The majority of those reserves are already concentrated in highly liquid dollar assets. Tether held just under $115 billion in U.S. Treasury bills, approximately $18.6 billion in overnight reverse repurchase agreements and about $7 billion in term reverse repos at quarter-end.However, approximately $47 billion remained in categories that would not qualify as reserve backing under the GENIUS Act, including precious metals, Bitcoin, secured loans, public equities and other investments. That represents roughly 25% of Tether’s reserve assets.

Gold, Bitcoin and Loans Create the Largest Gap

The GENIUS Act requires permitted payment stablecoin issuers to maintain reserves on at least a one-to-one basis using a narrow set of highly liquid assets.Eligible reserves include U.S. currency, insured bank deposits, Treasury bills and other Treasury securities with remaining maturities of 93 days or less, certain repurchase agreements backed by short-term Treasuries and qualifying government money-market funds. Gold, Bitcoin, equities and secured corporate lending do not satisfy those requirements.Tether’s largest non-qualifying category at June 30 was precious metals at approximately $18.8 billion. Secured loans totaled roughly $13.5 billion, while Bitcoin accounted for approximately $5.8 billion.Public equities added approximately $3.7 billion. Tether describes that category as containing indirect exposure to gold, Bitcoin and other assets. Another approximately $5.24 billion was classified as “other investments.” Together, those categories approach $47 billion.The mismatch does not mean Tether lacks sufficient assets to redeem USDT. Its latest attestation showed assets exceeding liabilities, and Tether generated approximately $1.5 billion of net operating profit during the second quarter.Instead, the issue is the composition of those reserves under the substantially narrower asset definitions established by U.S. law.

GENIUS Act Creates a Different Problem for Offshore USDT

Tether also faces a regulatory question beyond reserve composition because USDT is issued offshore rather than through a U.S.-licensed permitted payment stablecoin issuer.Under the developing GENIUS framework, foreign stablecoin issuers seeking continued access to U.S. customers would need to operate under a comparable foreign regulatory regime and satisfy other requirements, including the ability to comply with lawful U.S. orders. Restrictions affecting digital-asset service providers become increasingly important as the law moves toward full implementation.Tether has already created a separate product aimed specifically at the regulated American market. USAT launched in January as a U.S.-focused dollar stablecoin designed around the GENIUS framework, rather than requiring USDT itself to immediately adopt the same structure.The company has simultaneously taken steps to improve financial transparency. On August 14, Tether said KPMG U.S. had completed the first full independent audit of its 2025 financial statements, which showed reserves exceeding liabilities by $6.8 billion at year-end.For USDT, however, reserve quality under GENIUS is a separate question from whether the company is solvent or fully backed.If Tether ultimately wants USDT itself to satisfy the U.S. framework, roughly $47 billion currently allocated to assets outside the permitted categories could have to be shifted toward Treasuries, cash, eligible deposits or other qualifying instruments.With approximately three-quarters of its reserves already positioned in highly liquid assets, the transition is possible in scale. But reallocating roughly one-quarter of one of crypto’s largest reserve portfolios would still represent a significant change to Tether’s investment strategy.