Tether’s flagship stablecoin, USDT, is expanding at an unprecedented pace, reaching a record market capitalization of $160 billion despite looming challenges from new U.S. regulations.
According to a July 18 analysis by CryptoQuant contributor Darkfost, the surge has been fueled largely by activity on the TRON blockchain, where USDT supply has now exceeded $80 billion, surpassing the amount issued on Ethereum by $6 billion. More than $22 billion worth of USDT has been minted on TRON alone since January, reflecting strong demand for fast, dollar-backed transfers, especially within emerging markets and decentralized peer-to-peer ecosystems.
TRON’s low fees and rapid settlement times have cemented its status as the primary blockchain for routine USDT transactions. Notably, decentralized transfers on TRON now outpace exchange-based volume by a factor of five to ten, highlighting a broader shift toward protocol-based stablecoin usage.
However, this rapid growth comes as the United States tightens its grip on the stablecoin sector. On July 17, the House of Representatives passed the GENIUS Act, legislation that imposes strict reserve backing and licensing requirements on all stablecoin issuers operating within U.S. markets. The bill grants U.S. regulators authority to assess the compliance of foreign stablecoin firms, including Tether, which is headquartered in El Salvador.
If Tether fails to meet these new standards, it could face heightened scrutiny or even exclusion from U.S. financial markets—an outcome with potential global ramifications. Analysts warn that American regulatory influence may spur similar actions in other jurisdictions, mirroring Europe’s growing preference for compliant stablecoin alternatives and recent delistings of non-compliant tokens.
The GENIUS Act could also open the door for domestic competitors. Rivals such as USDC, issued by Circle and already aligned with U.S. regulatory expectations, may attract greater institutional adoption. Meanwhile, banks and fintech firms are expected to enter the stablecoin market under the new guidelines, intensifying competition.
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