Should Tether Be Credited for the Passage of the GENIUS Act?

The influence of Tether in the cryptocurrency field has increased significantly in recent years, especially in the first quarter of this year. Although Tether has not publicly supported any political bills, its market presence has had an unintended impact.

With the rise of stablecoins and Tether's dominant role, it is clear that Tether's position has a significant impact on global financial markets and even in US politics.

Tether's Influence

Currently, Tether is one of the largest holders of US government bonds in the world. With over 120 billion USD in US government bonds, Tether is approaching the scale of some countries like Germany in terms of holdings.

The ability of a single company to hold such large assets gives Tether a special influence on global financial markets. This massive holding suggests that Tether's actions and decisions can shape political discussions, 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 capitalization of 156 billion USD, Tether occupies a large portion of the 251.8 billion USD stablecoin market. Despite its large market presence, Tether remains cautious about direct political involvement.

Tracy Jin, COO of MEXC, exclusively shared with BeInCrypto that Tether prefers to maintain a neutral stance on political issues, avoiding any public intervention.

"Tether does not have a lobbying presence in Washington like US-based companies such as Circle or Coinbase. What Tether has is an undeniable market appeal. With 120 billion USD invested in government bonds, Tether's financial footprint in the US economy is already present, regardless of where the company is registered."

She also noted that USDT issued by Tether could be a factor of interest for the global economy.

"Some officials may view USDT as a net benefit for the global influence of the dollar – a Trojan horse exporting US monetary influence to places where the traditional banking system cannot reach. That story may have made Tether less threatening and more strategically valuable."

Tether's avoidance of direct political participation is noteworthy, as it allows the company to maintain a more independent position in the volatile cryptocurrency market. Nevertheless, Jin says Tether's influence cannot be underestimated.

"I do not believe Tether has directly driven the progress of the bill, but its scale has certainly influenced the urgency... Tether has become a systemically relevant factor in global markets. When a private stablecoin issuer holds more US debt than most countries, it compels regulators to scrutinize the ecosystem in which they operate."

Is the GENIUS Act Receiving Special Treatment?

The GENIUS Act has quickly gained support from both liberal and conservative sides, becoming one of the most widely supported cryptocurrency bills. Last week, the GENIUS Act passed the cloture vote and is now awaiting the Senate's final vote. This move puts it on track to become the first cryptocurrency bill passed in the US, potentially this week.

Tracy Jin notes that the race to become a cryptocurrency-supporting nation may be driving the urgency that has accelerated the approval of the GENIUS Act.

"The US has seen Europe moving forward with MiCA, and that was a wake-up call. The GENIUS Act allows the US to step in and define what a compliant, dollar-backed stablecoin looks like – and do so in its own way. That appeals to both Republicans and Democrats. It's a soft power move that reinforces the dollar without having to issue a central bank digital currency... the political window has opened. Cryptocurrency has matured, stablecoins have proven their utility, and banks are getting more involved. Legislators have seen an opportunity to lead – not react – and that opportunity doesn't come often. So support has quickly gathered."

As the bill moves towards the final vote, it is clear that the support it receives reflects the growing importance of stablecoins like Tether in the global economy.